Study: how long does it usually take for a 10%+ “small correction” to make new highs

[Troy Bombardia]

The stock market made a 10%+ "small correction" from January 2018 to present.

Most 10%+ "small corrections" take 2-5 months to make a new high, with 7 months being the maximum. The stock market topped in January 2018.

Based on the probability distribution curve of this study, the stock market will probably make a new all time high somewhere from late-June to late-August 2018

https://bullmarkets.co/study-how-long-before-new-high/

 

[neke]

I think you are defining a "small correction" after the fact. Not useful if you want to buy on the correction. Using the SPY as example, the "small 10% correction" of Mar - Apr 2000 took till June 2006 to come back to new highs. That of Oct - Nov 2007 dragged us thru the financial crisis and took till Aug 2012 to recover. So the time range can be quite substantial.

 

[tomorton]

Interesting. Thanks Troy.

(I'm long on the S&P since 21/05)

 

[schweiz]

With these 12 corrections you can never calculate any reliable probability. Everybody who knows stats and probabilities knows that. You need a significant amount of data. And significant is far beyond 12.
Writers make money by filling pages. That's what the author did. Fill pages.

 

[Pekelo]

And how often a 10% small correction became a 20% big correction?

The Nasdaq already had its ATH 7 weeks after the January top and also kind of now. The Russel just had it. So...

 

[John9999]

Looks like we just found out. Approx 90 days