Sam Stovall is an analyst that should be on the reading list of anyone who takes the markets seriously. Bloomberg is out with a piece about Stovall’s research into how long the S&P 500 takes to decline a set percentage and the resulting market action. I’ll let Sam explain…
From Bloomberg:
The Standard & Poor’s 500 Index (SPX) took longer than usual to fall 5 percent from its peak this year, a sign that any further retreat in U.S. stocks will be “contained,” according to Sam Stovall of S&P.
The benchmark gauge reached the threshold yesterday after spending 28 days without losing 5 percent from its April high. Since 1950, it has taken an average 19 days to fall 5 percent, based on a study by Stovall, S&P’s New York-based chief equity strategist. Among those that took 28 days or longer to occur, only 25 percent eventually turned into corrections, or retreats of more than 10 percent, the data show.
Source: S&P 500’s 5% Pace Hints ‘Contained’ Pullback (Bloomberg)
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