The S&P 500 recently completed a nine-day consecutive rally, a rare three-sigma event with a 1-in-370 likelihood. This bull run has energized stock market optimists. However, cautious investors should note that approximately 80% of such rallies have occurred near recessionary periods.
This chart can give you a nice perspective with the volatile monthly candle. YTD the SP500 is -3.31% as of the last Friday. Impressive, this prove that nobody can predict future prices with certainty.
Notably, a similar streak preceded the 1987 stock market crash, when the market plummeted about 20% in a single day. Historical patterns suggest that the extreme bullishness of the past nine days does not always lead to favorable outcomes.
Currently, earnings are driving the narrative. AAPL has dropped approximately 6.5% since Thursday’s closing prices. It’s challenging for me to provide a definitive view due to mixed signals—some systems are long, while others are also long.
