Sucker’s Rally? What and where?

It is held that the recent sucker’s rally had gone bonkers.

Courtesy of Hussman Funds: Dow Industrials During the Great Depression

A sucker's rally basically means a cyclical (short-medium term trend) bull market within a secular (bigger trend) bear market.

For starters let us look at how the Dow Jones Industrials performed during the Great Depression.

This from Dr. John Hussman, ``we should recognize that even during that prolonged decline, it rarely made sense to sell into a major break of a previous low, because investors invariably had a chance to sell on a later recovery to the prior level of support…. Even if one hung on after the enormous rally of nearly 50% that followed the initial 1929 low, the market's initial break of that low (the first horizontal bar) was followed several months later by a rebound to that prior level of support. The break of the second intermediate low of early 1931 (the second horizontal bar) was followed by a rebound later in the year to that same level. Third break, same story.”

As you would notice even during severe bear markets, there had been interim "sucker's rally" as described by Dr. Hussman.

It had been basically the same in the Dot.com Bust…

Courtesy of chartrus.com

The dot.com bust shows two major "sucker's rally" (red ellipse).

Now let us look at the current action in the US markets…

Or in the global markets (Europe, Asia, Emerging Markets)...

Or even in the commodities markets…

Does a 15+/-% rally equate to a relief or sucker's rally? Not at all.

Hence, we don't see any trace of a typical sucker’s rally based on conventional measures, which means there has been no "delusion". What market action tells us is one of a typical meltdown.

Instead, the belief that markets ought to move in a linear fashion in order to prove one's convictions seem to be a product of overweening DELUSION.