Since October CPI unexpectedly better than expected yesterday, the market has experienced the strongest rebound since pandemic, and three major indexes have soared.$SPDR S&P 500 ETF Trust(SPY)$$Invesco QQQ Trust(QQQ)$$DJIA(.DJI)$
Refers to, A better-than-expected CPI means better market?
According to statistics, from 1950 to now,$S&P 500(.SPX)$The index rose 5.5% in a single day to rank 15th, and the highest rebound in history was 11.6% in a single day in 2008.
But what will happen in a period of time after the index rises sharply?
The following table shows the performance in 5 days, 10 days, 1 month, 3 months, 6 months and 1 year.
Notice, most of them recorded positive returns after one year.
However, there are two exceptions, January 2001 and September 30, 2008. Both of them are in the middle or early stage of a financial crisis, the market has not recovered, and Big bounce is just a dead cat jump.
Will the surge recorded in history on November 1, 2022 become the third special case of falling more in the following year?
Everything, it is necessary for the market to judge the reality of "economic recession" or "financial crisis".
Are you bearish or bullish?
Comments
I am bullish after the recent epic rebound and believe that the momentum of last week's rally will continue this week.
Firstly historically after the US Mid term elections, the markets have been up since the 1950s. Just yesterday the Democrats have won the Senate by a close margin and the Republicans are poised to win the House of Representatives. A divided Congress is good for the share markets as there is a cross check and balance of power.
Secondly there have been huge layoffs by Tech companies especially from Meta Platforms and Twitter. Should unemployment numbers continue to increase, the Feds may pivot to a less aggressive stance on interest rate hikes.
There is normally a Santa Rally towards the end of the year due to increased spending for the festive season.
Thanks for your excellent analysis of the market last week. Let's hope for the epic rebound to continue till the end of the year. 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰😍😍😍🍀🍀