Friday, March 19, 2010

Dow Rally Below Average In Duration & Magnitude

The Chart of the Day has an interesting chart this week that shows the current Dow Jones Industrial Average rally compared to past rallies back to 1900. It may come as a surprise to many investors, but this rally is below average in duration and below average in magnitude of the advance. The Chart of the Day notes:
  • each dot on the chart represents a major stock market rally as measured by the Dow
  • as the 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.
  • most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days -- highlighted in the below chart with a light blue shaded box.

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