Some of the biggest upside moves turn out to be mere bear market rallies, so the recent surge – the S&P 500 has gained over 10 per cent since mid-October – doesn’t mean stocks have turned the corner.
Nevertheless, last Thursday’s big move, when the S&P 500 gapped up by over 3 per cent at the open, looks bullish, says the Carson Group’s Ryan Detrick. Similarly large gaps higher were seen in November 2020, after the US presidential election; in March-April 2020, when there were five such episodes; at another market bottom in August 2015; and in May 2010, after the short-lived flash crash in US stocks.
“Those weren’t the worst times to be optimistic about the world,” notes Detrick. Investors will be hoping history repeats itself in the coming months, easing the pain of what’s been a very troubled year for stock markets.
