Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Tuesday, 28 February 2012

Bespoke: after a fast 15% rise of equity markets a further rise is a bit more likely than normal

The blog Bespoke had the table above what happened when the S&P500 had risen more than 15% in the three previous months.
One could expect like the bears that time is rife for a decent correction, mean reversion to lower prices. That was not what the data mining exercise of Bespoke showed (results from the past are no guarantee for the future as every impoverished speculator of the last years now well enough knows).

In the following three months after a 15%+ event the market rose on average not the normal 1.76% but 3.2%. On average in normal times the S&P rose in 62% of the times, but after 15% + explosion that was even more: 77%. Momentum was often a winner.

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