Image: [Screenshot-2025-04-10-at-8-36-27-AM.png](https://postimg.cc/Jy5RP0Q1)
tl;dr: We are likely within a few short months from market bottom if not already there.
The top graph shows RUT (Russell Small Cap 2000), which has been a reliable indicator of where we have been in terms of days to market bottom for the last 35 years.
For the top graph (RUT), the y-axis is the log(price) which is required to get the trend line functions to work properly - not useful other than getting the script to work. Each trend line is a standard deviation from the log-linear mean (center black line). The vertical red lines are the transition from one standard deviation below the mean to the next market bottom. The SPY is the graph below which shows how it correlates to RUT pricing and market bottoms. I added the days to market bottom as a bar chart and, as shown, only the two major recessions hit >100 days. With the current price of RUT we are 14 days into the count.
The main point is that when this index is below one standard deviation from the mean (bottom gray line) it's a good buying opportunity - and - shows that we are likely not far from a market bottom regardless of the situation. What I consider to be the "short-term pain" rhetoric.
Considering the extreme overvaluations during the 2000 market top and the havoc that occurred during the financial debacle during the end of the 2000s, the max time from the bottom was around 180 days (6 months) based on this analysis.
That being said, the market is forward looking so if we hit 2 standard deviations below the mean, which has been close to occurring in all four recessions, then expect the economy to feel pain with unemployment rising for a an additional year (economic recovery lags market bottoms).
