Chart of the Day - Tuesday, January 28th, 2020

Today’s Chart of the Day was shared on Twitter by Andrew Thrasher (@AndrewThrasher). It's a chart of the S&P 500 since the Great Financial Crisis low in 2009. The green vertical lines represent all the instances where $SPX fell 2.25% or more over two days and then rallied at least 1% the next day, as it did over the past three sessions. Andrew found that the index was historically up 70% of the time in the two weeks following this pattern of price action. He adds that "Results saw some lows first but several instances of immediate continuation of the prior trend." The slight pullback between Friday and Monday certainly felt jarring due to the lack of volatility over the past few months. However, if history is any guide, it's not only possible but likely that the S&P 500 will continue higher following this sort of price action.