Stock Market Bottoms
Despite the hair-raising March 2009 low, that was not the secular bottom for the US stock market. We will likely witness the US stock market (& other equity markets) fall back to re-test the March 2009 low during a market collapse in 2017-2018.
The Greedometer can teach us something about how the stock market behaved at the lows in early 2009. It dropped nearly to 0 – an all-time low. Again, never before seen fiscal and monetary stimulus was required to stop the collapse. Without that largesse, the stock market would have plumbed lower depths, and the Greedometer would have registered even lower readings -almost certainly negative (requiring a recalibration of the gauge). But because the collapse was stopped by government interventions, we don’t know how low the Greedometer reading, economic collapse, and stock market drop would have gone.