We decided to take a further look at the highlighted statement above to see if we have hit a ‘significant bottom’ in the stock market after 3 consecutive daily rallies of 1.75% or more last week.
……A lot of people have been talking about this pattern. The implication is this represents a thrust off a low and the start of a significant move higher. History shows this has only been the case when this pattern results in a breakout of the previous range (see 1984). When this thrust results in a move back into a defined range (see 2002), it has little meaning. When the market only barely broke out (see 1974), the market churned sideways for months before moving higher.
Has the market’s trend changed? For now, the answer appears to be “no.” Until a breakout is established, we would not get that excited about the three consecutive daily rallies of 1.75% or more.
Source:
Bianco Research, LLC.
October 10, 2011
via Has The Stock Market “Thrusted” Off A Bottom? | The Big Picture.
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