Best 50-day Rally Ever

weekly market update
Steven A. Lone

In many ways, what we’ve seen so far in 2020 has been both record-breaking and devastating. From the S&P 500 Index peak on February 19 to the bear market lows March 23, stocks lost 33.9%. Now, 50 trading days later, stocks have gained 39.6%, for the largest 50-day rally since the S&P 500 moved to 500 stocks in 1957.

“There are no rollercoasters that can replicate what stocks have done so far in 2020,” exclaimed LPL Financial Senior Market Strategist Ryan Detrick. “Here’s the catch though: Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish.”

As shown in the LPL Chart of the Day, the 39.6% gain in 50 days was the greatest 50-day rally ever, besting the previous best in October 1982. What’s important to note here is that many of these rallies took place coming off major market lows, and delivered quite strong returns going out 6 to 12 months.

largest 50-day S&P index gains ever (greater than 20%)

View enlarged chart

Although we have near-term worries given this historic run, as some sentiment indicators such as put/call ratios are showing some froth, from a bigger picture perspective, this strong 50-day rally offers a reason to think stock prices may be even higher this time next year.

For more of our investment insights, check out our latest LPL Market Signals Podcast.


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