The S&P 500 has now been up for 4 straight weeks, registering a gain of 23.28%. Interestingly, the last time we had a 4-week winning streak that saw gains of at least 10% was 10/02-11/02, which was the start of the five year bull market that ran until 10/9/07.
Below we highlight all 4-week winning streaks of 10% or more for the S&P 500 going back to 1927. As shown, this is the 3rd strongest 4-week winning streak on record, and the strongest since April 1933. The average change in the fifth week following these 4-week periods has been 0.24%, while the median change has been -0.35%. The average change over the next 4 weeks has been 1.87%. But as highlighted in blue, the only other times the index has gained more than 20% during these 4-week winning streaks, the market has shot significantly higher over the next 4 weeks.
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If that really was the bottom (which I expect we'll be revisiting), what was the cyclically-adjusted P/E at that point?
Posted by: marc | April 04, 2009 at 12:29 PM
Between 1929 and 1932 the DOW had 7 bear rallies between 11% and 39% ...of course none of them were "exactly" 4 weeks.
This is nearly meaningless analysis ...misleading at best.
The previous post nailed it ...the current 4 quarter trailing PE estimate for next quarter is 200! It has never been anywhere near that high anytime in history.
I think this rally has more steam, but we at least retest 666 ...maybe plunge further.
Posted by: Jim | April 05, 2009 at 02:23 AM