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We are habitually, nay pathologically, skeptical of market rallies here at MarketBeat.
But we are trying to become better-rounded individuals, learning which forks to use in which portion of the frozen-dinner tray and learning not to immediately scoff when somebody gives us some data that challenges our preconceived notions.
Dan Greenhaus of BTIG, who is already a far better-rounded individual than we are, but also shares some of our notions about the direction of the market, makes us sit down and eat this bullish nugget like a plate of peas today:
In light of the jump in futures following the monthly payroll report and the modest rally to open the trading session, we worked with Josh Dollinger, BTIG's technical guru, to make an interesting observation; the S&P 500 was up in each of the last three sessions by more than 1.75%. Believe it or not, this rarely happens in the post war era and indeed, has only happened on three other occasions; October 1974, August 1984 and August 2002.
In each case, the three day rally marked a significant market bottom or, in the case of 2002, was closely associated with one. As the table below shows, in each instance, the S&P 500 was higher one year later. This would somewhat complicate our 2012 recession/bear market call however Mr. Dollinger and I thought the data was worth passing along.
Because we can’t help ourselves, we’ll point out that the sample size is small, and that past performance is no indicator of future results and all that. Still, it’s another thing for the bulls to hang their hats on.
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One of the richest men I’ve ever known had three questions when someone pitched him a deal:
What’s the upside? What’s the downside? What’s the time-frame?
In the instant case the question is: Were this week’s lows the lowest the indices will ever go? Or do the bottom callers mean the low is in for this quarter?
If we are ina secular bear market, and after 11 years (since Naz 5048) it’s starting to feel like one, we could see lower lows until 2020.
There are reasons to think this one might be done quicker than the ’66-’82 iteration:
December 31, 1964: DJIA 874.12 December 31, 1981: DJIA 875.00
“Now I'm known as a long-term investor and a patient guy, but that is not my idea of a big move.” -Warren Buffett
Jason, poor spelling is another pathology. We’re fixing, thanks.
“We are habitually, nee pathologically…”
I think you mean
“We are habitually, nay pathologically…”
Unless you mean to say that you were born Mark Pathologically.
Perma bulls! No matter the evidence the street just cannot get the bullish bias out of its veins. This is why so many people get waxed in stocks. Folks! Toss out the bias, the traditional modes of measure. As the man wrote: “this is an era, not an event, and it has nothing to do with 5%.” Chad in CO
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MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what's happening in the markets. MarketBeat lead writer Mark Gongloff spearheads the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to marketbeat@wsj.com or write Mark at mark.gongloff@wsj.com.
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