«Not as long as you think.»
Traders,
Coach Tyler here.
Yesterday we looked at how stocks perform after the S&P 500 falls into a bear market. The takeaway was one of optimism because forward returns, particularly when we don’t fall into a deep recession, are pretty good.
While Tuesday’s message was one of magnitude, today’s is one of duration.
The chart of the day looks at all previous bears or “near bears” back to 1950 and maps out how long it took for stocks to make a new high afterward. Three things jump out at me.
First, the average bear market is -30%. Remember, the S&P 500 was -20% from the highs on Friday.
Second, on average, it took 19 months to recover to new highs following past bears.
Third, if you bought SPY now at $390 and we did recover back to the peak ($479.98) in 19 months, it would translate into an annualized gain of nearly 15%.
Video of the Day: How to use Finviz heat map to analyze the stock market
In this video, Coach Tim Justice explains how to use Finviz Heat Map to analyze the stock market so you can prepare for the day/week ahead.
Chart of the Day: Bear Market Recoveries
LPL Research strikes with another great chart showing the length of previous bear market recoveries.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coaches Emily Muiruri and Greg Holmes talked about Exit Strategies or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trade Masters 7:00 PM EST
Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.
Trading Justice 477: Interview with Travis Corcoran
In this episode of the Trading Justice podcast, the boys welcome Travis Corcoran (@corcorantravis in IG) author of Restoring Reason, Using the Ancient Liberal Arts to Defend Against Modern Manipulation to discuss critical thinking as well as the importance of self-taught education.
Before that, Mark and Matt take a journey through the market skyline and discuss sector rotation at the bottom of markets, things to look for in bottoming conditions, and debate the value question.
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