Stocks up are up 2.5% Tuesday — here’s what happened every time stocks popped this much this year
Stocks are getting a nice pop on Tuesday, but history shows gains such as these this year are typically followed by losses immediately. Here are the 10 biggest rallies in the S & P 500 this year. Tuesday’s gain would rank third on this list. The broader market index has averaged a loss of 0.8% the trading day after one of these bounces. The benchmark averages a 0.9% decline one week out. One glance at the list also shows some of the biggest declines of the year followed bounces like these, as investors used the gains to quickly bail on this troubled market. These oversold market bounces seems like typical bear market behavior. The bear was confirmed earlier this month, but actually started in January. The S & P 500 is down 22% from its high and 21% for the year. Investors were already questioning Tuesday’s gain because there was no apparent catalyst for the pop, other than just big losses preceding it. The S & P 500 posted its biggest weekly loss of the bear market last week. If this is the bear bottom, investors will want to see a string of advances that breaks this pattern.