Some financial analysts are assured that over the next six months American stocks will most likely grow.
Well, at the first sight it doesn’t seem to be realistic enough, especially considering how global markets are performing now, including a recent triple-digit loss for the Dow Jones Industrial Average. Nevertheless, there’s a hope backed by thorough analysis of the last 120 years. During that period, the stock market also faced precipitous tumbles as we had in December, for instance.
For all market participants it makes sense to get prepared for an upcoming surge in the stock market.
Does this assumption have grounds? Yes, it does. To make such a conclusion analysts paid attention to drops on the Dow, which appeared to be as steep as the one financial markets had faced since the end of December. For the last 29 trading sessions, the Dow managed to tumble more than 11%. To back up this conclusion, analysts processed all data back to the late 19th century, when the Dow firstly appeared.
As follows from the recent market observations, drops exceeding 11% for the last 29 trading sessions weren’t painful enough to make investors throw in the towel. That definitely drops a hint at apparent preconditions of an upcoming rally.