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.

3 comments:

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 - http://chartsandcoffee.blogspot.com/2009/03/sunday-night-coffee-3222009.html