SPX Performance After Big Weekly Reversals

After losing 5.6% this in the week ending 10/30/20, the S&P 500 completely reversed the losses this past week with a 7.3% gain. That is a fairly remarkable turnaround. Below is a look at all other times the S&P 500 lost 5% or more one week, and then made up for the losses and more the next week.

Instances are very few. Three in the 1930s, three in the 2007-2009 bear market, and then once in 2010 before this past week. Results are mostly mixed, with some struggles occurring over the next 13 weeks. Does not appear to be a great signal, but expecting the turnaround to continue to rocket higher from here would seem to be overly optimistic.

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