The Nasdaq could be primed for huge gains after hitting a horrific milestone, history shows

The Nasdaq Composite is performing at one of the most “miserable” levels ever, and a level not seen in more than a decade, according to Sundial Capital Research. The good news: That usually gives way to an uptick. The composite fell for the fifth day in a row on Tuesday. It is down more than 30% so far this year and also hit a new low in two years. It’s the first time these three indicators have flashed together since the 2008 recession. And it’s only the sixth time since the composite’s launch in 1971. “The Nasdaq has entered the elite business, entering the most miserable markets ever Jason Goepfert, chief research officer of Sundial Capital Research, said in a tweet. Sundial does business as, where the data is posted. Rebound Historically, the Nasdaq typically bounces back after these three conditions are met. In five previous cases, the index was always higher a week later and the median gain was 5.3%. A year later, the median gain was 20.3%, but the spread was wider, with two cases lower and three higher than what Goepfert called the original point of “misery.” After 2008, the profit was 40.5% a year later, while in 1973 the loss was 34.3% a year later. Certainly, there were seldom times when the index would fall over the course of each year. But the data is in line with general sentiment that a bear market often – but not always – triggers a rebound. Historic points The last time these signals were triggered was during the global financial crisis, in October 2008, when they flared up twice in the same month. For this, the three conditions had been met in September 2001, shortly after the reopening of the markets after the 9-11 attacks; in 1974, a few weeks after President Nixon’s resignation; and late 1973, in the midst of the Arab oil embargo that followed the Yom Kippur War. Interestingly, all six cases occurred in the last four months of the year: twice in September, three times in October and once in December.

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