FYI: December was a brutal month for the stock market. Here are the daily returns through Christmas Eve (losses of 1% or worse in red):
Not only was the S&P 500 down almost 15% for the month at this point, but it was in the midst of a bear market that began in late-September:
Then a funny thing happened the day after Christmas — stocks were up bigly. The S&P 500 rallied almost 5% in a single day.
A chorus of traders, prognosticators, investors, and market historians chimed in after that relief rally to decry, “Stocks don’t bottom on big up days.”
This is the kind of statement that makes sense when you study market history. Volatility tends to cluster in the markets because market fluctuations force people to overreact. That’s why the biggest down days tend to coincide with the biggest up days (see the data from Michael here).
The combination of big up days and big down days is one of the reasons bear markets are so difficult to navigate no matter how you’re positioned.
You know what happened next:
Regards,
Ted
https://awealthofcommonsense.com/2019/02/cherish-your-exceptions/
