Chart of the Day - Wednesday, September 9th, 2020

Today’s Chart of the Day was shared on Twitter by Ryan Detrick of LPL Financial Research (@RyanDetrick). The past few sessions have been a wild ride for Stocks, specifically Tech stocks. Ryan points out that in just three days, the Nasdaq went from an all-time high to being down 10%, marking the fastest correction on record. The table shows the forward returns following the prior 11 fastest corrections. Ryan points out that the forward returns have historically been quite strong. As you can see, the median returns were positive across all four-time frames. To be fair, the short-term average returns (1-month) have been lackluster. However, the longer-term average returns (3, 6, and 12-months) have been impressive. As we mentioned on Friday, corrections in bull markets are healthy, as they help to reset sentiment and shake out the weak hands.  As always, this is just one of many data points to consider.