The recent stock market rally

A rare four-decade extreme acceleration
The RSI of the NASDAQ 100 went from 28 (oversold) on March 30 to 70.5 (overbought) on April 15,
All within just 11 trading days.
This speed is the fastest in 40 years of data.
Previously, the fastest was 25 trading days, with an average of over 60 days.
It is also the quickest since 1928 for a correction of this level followed by a new high.
Looking ahead, the long-term outlook is actually quite promising.
Historically, there have been 44 instances of over 11% gains in 10 days.
The 12-month average gain is 24%, with a median of 30%, and an 80% win rate.
The 6-month win rate is also 74%.
But don’t expect a straight upward climb.
Short-term pullbacks are almost standard.
After these rallies, the average maximum drawdown is around 18%.
The pace is very intense, not friendly to those heavily leveraged or with large positions.
In the short term, keep an eye on these numbers:
Referencing the closest past rallies,
The rebound during the pandemic was an 8% pullback,
The 2018 turning point was 6%, and the Asian financial crisis was 7%.
So, in the next 2 to 4 weeks,
A 3% to 8% correction is highly likely.
The ceasefire on April 22 is about to expire,
It’s very likely to be the trigger point.
A shakeout, a washout.
The overall trend is still upward.
Looking at longer-term patterns,
Since 1990, even when the S&P 500 has had a big year,
The average intra-year pullback is about 14%.
A normal correction usually lasts around 17 days.
So, this pullback isn’t a risk signal,
More like a window for people to get back in.