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Opinion
John Authers

It’s Far Too Risky to Assume That the Bottom Is In

While it’s true that previous market selloffs weren’t preceded by a global pandemic, the case for more volatility versus a rebound with staying power is strong. 

Will the July rally defy history and show staying power? Historical data give reason to doubt.

Will the July rally defy history and show staying power? Historical data give reason to doubt.

Photographer: Timothy A. Clary/AFP/Getty

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Now that I am back with graphics, let me explain the dilemma of the stock market. The last month saw quite a rally, followed by a relaxingly dull day to start August. Markets never move in a perfect straight line, and protracted selloffs include plenty of invigorating rallies. The following chart maps the S&P 500 after its recent high in January, and after the peaks before the great bear markets that started in 2000 and 2007. Even after the hot July, this selloff is still somewhat more intense than either of those: