Global market authority Bert Dohmen has been saying for a number of months that the stock market would be OK until the end of August, and then start a strong decline in September. So far that has been right on target.

This current period reminds us of the period around the year 2000. In our September 4th issue of the award-winning Wellington Letter, we showed the similarities between the current market set up and the year 2000 bear market.

Below is the chart of the S&P 500 (weekly) during the early 2000s. Back then, the market had plunged from March to April 2000, similar to what we saw in February-March 2023, i.e., the US banking crisis. The aftermath of both plunges was followed by the start of a strong rally.

That rally from the first plunge bottom in April 2000 lasted until September 1, 2000, making it a 5-month bear market rally.

Then, on September 1, 2000 the typical Phase 2 decline of the bear market started. In technical analysis that is typically the most severe decline…and it was!

During the bear market rally from April to September 2000, enthusiasm for stocks was tremendous. We continued to ring the alarm bells, saying that the bear market was not over. It is not easy to be in the very small minority. It reminds us very much of the current market.

The first chart below is the S&P 500 from 1997 to 2003. Note the arrow at 9-1-2000.

That seems similar to now as the index failed to make a new high on the rise from October 2022 (blue horizontal line) to July 27, 2023. That would make that rally a bear market rally, similar to what happened during the year 2000. Here’s the weekly chart of the S&P 500 from the 2020 bottom to now.

Note that Phase 2 of the bear market from 2000-2002, the NASDAQ COMP lost 80% of its value. It was a bloodbath.

In the year 2000, we gave our “sell” signal on March 10, 2000. As we know now, that was the exact day of the bull market top.

See the monthly chart of the NASDAQ Comp below from 1997 to 2003.

It is very important to note that the entire bull market from 1998-2000 was wiped out during the bear market that followed in 2000-2002.

Therefore, we could see the same thing happen now, where the entire rally since the plunge bottom of March 2020 is erased. That would be quite scary for unprepared investors.

Our longtime members will remember that during the rally that started in April 2020, we said that the entire rally of that bull market would be retraced in the next bear market. Well, here we are, in the heart of the “next” bear market.

Lately we have finally started to hear other investment professionals with long term track records pointing out the true negatives for the market, which we have mentioned for the past six months in our award-winning Wellington Letter.

This includes the deceptive big gain of the S&P 500 index this year, which has led investors to believe that all stocks have performed well, whereas it has only been seven out of 500 stocks that had good performance. The other 493 stocks as a whole did nothing.

If those seven stocks, called the “Magnificent Seven,” which is led by Apple, now have a hefty decline, the index will tumble.

Below is the daily chart of the “equal weight” S&P (SPEW, candlesticks) vs the capitalization weighted S&P 500 (thin blue line). Note the huge difference in performance between the two since March of this year, although they contain the same stocks. This demonstrates how important it is to do more than casual research.

Our next target for the equal weight S&P 500 SPEW Index is the March lows (“X”). That is roughly another 5% down from here.

CONCLUSION: For 46 years our motto has been: “Timing is Everything.” 

Don’t get fooled on any rally attempt right now; our work suggests that Phase 2 of this bear market has already started, which is usually the most severe.

Sentiment is still quite bullish right now, with many in the financial media saying this “dip” is a “buying opportunity.” Of course, they are the money managers who are fully invested and have to be. They have no choice but to beat the drums.

While the bulls are heavily invested, the market has already been declining. To us, these factors confirm our bearish outlook. It won’t be long before the majority runs for the exits.

Our members are currently prepared to once again be part of the “Winning Minority” by taking advantage of the great opportunities in this market downturn.

Wishing you successful investing

Bert Dohmen
Founder, Dohmen Capital Research

P.S. To learn about the opportunities we see in the market heading into year-end and beyond read our latest award-winning Wellington Letter, titled “The Bears Will Now Have Their Turn…Again” (published September 17th) by signing up today at

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