The stock market broke record this year, crashing 30% in just 22 days. Fastest in history.
The rebound was quick and strong too, with Dow Jones Index staging one of the highest weekly returns in history.
The S&P 500 has recovered by 27% after crashing 34% from its peak. It is still down 16% from its 2020 peak.
The question in every investor’s head is whether this is a dead cat bounce (i.e., market would resume its downtrend eventually), or a real recovery.
We will look at various indicators to help us with the answers.
Real Recovery Argument #1 – Stock Market Goes Up Within 6 Months From the Outbreak of An EpidemicBelow is the chart compiled by Charles Schwab and Factset. On average, the MSCI World Index has done well after an epidemic occured, making 8.5% gain after 6 months on average. Only 4 occurrences
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