Generally speaking, over the past 50 years, the market has seen next-day strength following big selloffs and moderate rallies.
Next Day Price action Following Significant Market Up or Down Moves in the S&P 500
click for larger graphic
chart and data courtesy of Michael Panzner
Data for 1955 – 2005:
Market fell more than 4% on 16 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 3 18.750% -1.918% -7.655%
Up 13 81.250% 2.425% 2.722%
Market fell between 3% and 3.99% on 29 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 12 41.379% -1.513% -1.610%
Up 17 58.621% 0.800% 1.134%
Market fell between 2% and 2.99% on 168 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 87 51.786% -0.876% -1.136%
Up 81 48.214% 0.824% 1.324%
Market rallied between 2% and 2.99% on 182 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 74 40.659% -0.416% -0.610%
Up 108 59.341% 0.710% 0.971%
Market rallied between 3 and 3.99% on 41 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 15 36.585% -1.113% -1.010%
Up 26 63.415% 0.877% 1.009%
Market rallied more than 4% on 23 occasions:
NEXT DAY # Days % of Total Median Gain/Loss Average Gain/Loss
Down 10 43.478% -1.371% -1.480%
Up 13 56.522% 1.441% 2.276%
Barry, Again great work and kudos to Mr. Panzer. Did you like this weeks Tues – Thurs action? Don’t forget the redux.
I’d be interested to see those numbers for the last 10 years and last 5… with 1% numbers included. Seems fairly frequent lately to have 1% gain or loss in a day.