Investors are wondering whether recent S&P 500 weekly rally, its biggest since November 2020, is another bear market rally. Photograph: Krisztian Bocsi/BloombergThe S&P 500 recently enjoyed its biggest weekly rally since November 2020 but no one’s celebrating. Instead, everyone’s asking: is this another bear market rally?
No one has a crystal ball, but bearish strategists rightly note that stocks were poised to pop. The S&P 500 was trading at oversold extremes following seven consecutive weekly declines – a losing streak seen on only three other occasions in history. However, it’s also true that strength usually begets strength. LPL Research’s Ryan Detrick looked for other instances where stocks gained more than 6 per cent in a week. Six and 12 months later, stocks averaged gains of 12.5 and 21.7 per cent, respectively. SentimenTrader’s Jason Goepfert agrees multi-day reversals like we’ve seen recently have “consistently preceded further gains”.
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Source: IrishTimes - 🏆 3. / 98 Read more »