Thursday, March 19, 2009

A 20% Rally In Under 2 Weeks

The current rally has seen the S&P 500 rise over 20% above its recent lows. I looked at other times back to 1960 where the S&P rose 20% or more within a 2-week period. There have only been 3 other instances: November 2008, October 2008 and Following the Crash of 1987.

While the Dow hasn’t managed a 20% gain yet I did use it to look back to 1919. There was only one other period where there was a cluster of multiple rallies of 20% or more in 10 days or under. That period was 1931-1933. Below is a chart of the period. I’ve noted every 20% 10-day rise with a buy signal. The sell signal occurs 20 days later so you can more easily see how it performed after the rise.

Short-term results were mixed. As a whole this was a horrible time for both the stock market and the economy.


uempel said...

Now that's interesting. Thanks!

Dave McKay said...

Rob, Didn't you previously say that it was the action of the days AFTER the IBD FTD that was more of a success predictor than the FTD itself?

Wasn't last thursday the 12th the FTD? Thanks!

Charts and Coffee said...

Interesting analysis. My weekly market forecast -