Bespoke Investment Group gives us some facts on 300+ rallies, when they occur, and what they may signal. Merrill Lynch analysts appear rather negative lately, and the next article suggests a theory as to why that may be. – Ilene
Dow Jones 300+ Point Moves and Bear Markets
Excerpt:
"Merrill Lynch’s David Rosenberg was on CNBC this morning arguing that yesterday’s 300+ point move was simply a bear market rally, and that 300+ point moves usually occur during bear markets. He then went on to say that during the entire bull market from 2002-2007, there was not one single 300 point rally.
While 300 point rallies usually occur during bear markets, they have also occurred at the start of major rallies. In fact, the Dow rallied 13.1% and 12.5% following the first two ever 300+ point moves in the Dow at the 1998 lows. They also occurred multiple times at both the July ’02 and October ’02 lows. In fact, Rosenberg’s argument that there were no 300+ point rallies during the last bull market was simply incorrect. The Dow actually had two 300+ point days on 10/11/02 and 10/15/02, both of which came during the first week of the bull market.
Read more and view chart here.
