Bear Barometer

While most stock market declines are false alarms when it comes to predicting recessions, when the market declines by 20% or more, watch out. In the past 50 years there have been seven such declines. The worst three, 1973, 2001 and 2007 were followed by recessions. Of the remaining four, in 1969 and 1981 recessions followed, but not in 1966 and 1987. The market is down 13%.