Speedy Dip-Buying Mini S&P Corrections Has Become a Market Habit
- Equity benchmark has no 10% corrections in 2021, like in 2017
- Seasonal December rally threatened by possible Fed policy
Photographer: Michael Nagle/Bloomberg
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The S&P 500 Index hasn’t had a technical correction of 10% or more in 2021. Instead, more frequent shallow pullbacks of 4% to 5% have become the norm -- followed by quick rallies.
The speed of the bounce-backs is noteworthy, taking almost half the time to recover lost gains than the drop itself. Today’s Chart of the Day illustrates the dynamic on a logarithmic scale. In essence, the dips are being bought at a faster rate than the historical norm.