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Sunday, March 21, 2010 11:51:06 AM
Chart of the Day - COTD - Typical Rally? So Far this Rally has been both Shorter and Below Average in Duration!
http://www.chartoftheday.com/20100319.htm?T
The Dow continues to make new rally highs. To provide some perspective to the current Dow rally that began just over one year ago, all major market rallies of the last 110 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. As today's chart illustrates, the Dow has begun a major rally 27 times over the past 110 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) has entered the low range of a "typical" rally and would currently be classified as both short in duration and below average in magnitude.
My Comments - RtS
The rally so far has lasted a little over a year. We are overbought now and due for a pullback but an average rally would last at least twice as long with another 40 to 50% gain if I am reading the chart right. Of course not all sectors would normally continue to benefit equally in any further advance.
http://www.chartoftheday.com/20100319.htm?T
The Dow continues to make new rally highs. To provide some perspective to the current Dow rally that began just over one year ago, all major market rallies of the last 110 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. As today's chart illustrates, the Dow has begun a major rally 27 times over the past 110 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) has entered the low range of a "typical" rally and would currently be classified as both short in duration and below average in magnitude.
My Comments - RtS
The rally so far has lasted a little over a year. We are overbought now and due for a pullback but an average rally would last at least twice as long with another 40 to 50% gain if I am reading the chart right. Of course not all sectors would normally continue to benefit equally in any further advance.
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