Handicapping the market from here — what history tells us about the odds the comeback continues

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Can history help handicap where markets head from here after the extraordinary path stocks have taken so far this year?

The violence and velocity of the crash-and-surge moves in the major indexes has placed this market in rare company, with relatively few precedents to mine for hints of what has tended to come next.

Still, these analyses cover very narrowly defined conditions, and neither ten nor 19 instances from the past remotely approaches a statistically robust sample.Then there's the fact that they don't quite fit with some circumstances that usually occur in situations like the one this market is in. Then again, while stocks usually do fairly well in election years, they usually do quite poorly leading up to an election in years when the incumbent party loses the White House, as this chart from LPL Financial shows.

There is also a distinct rhythm to markets that, perhaps, makes it a bit more prone to producing extreme momentum readings of the sort that the bullish outlooks above are based on.

 

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Well we counter trade you so...

The history of the 1930s tells us this will be a decade long Great Depression.

What does common sense tell us about the market? Back to near all time highs with an unemployment more than double what it was pre-Covid. That does not make sense.

CNBC, youth football coaching legend here. I have a 28% chance of re-joining the league next season and other odds are even higher. I don’t care if it’s former greats like I am or not. Just do it.

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