That's a positive divergence for the stock market.
Thanks joj!
Only seen 25 times since 1945.
What happened in S&P 500 over next three years?
Are stocks out of the woods?
We reviewed all twenty-five previous cases and found only a handful that aligns well with the present-day market. The best fit appears to be the breadth thrust that occurred off the 1962 plunge low. Note in both the 2019 case above and the 1962 case below, the market was clearly in a downtrend.
In the 1962 case, over 61.8% of the original V-bottom move was retraced before the bulls took back control of the tape. The giveback period lasted two months.
The yellow portions of the table above show us that stock market (SCHB) gains tend to moderate over the first ninety days following the initial push off the low. The yellow boxes in the table above speak to consolidation, sideways movement, givebacks, and tamer and more sustainable slopes in the stock market's advance.