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Analysing 50-years of market crashes to predict the next move lower - Substantive Research

16 March 2020

Substantive Research covers Longview Economics latest publication on historic price action during pullbacks


With volatility in markets remaining high, the latest report from Longview Economics sets out to gauge the potential path of future price action as two, and possibly three, economic shocks play out in the global economy. The firm says given the recent violent moves in indices such as the S&P500 cash index, it is instructive to note the typical price action of markets after sharp 10% or greater sell-offs/crashes. To that end, Longview has analysed all those crashes since the late 1970s, a total of 15 sharp pullbacks, to assess how the stock market typically behaves after one of those initial waves of selling. The firm finds that after the initial wave of selling, the probability of a later retest of those initial lows is high. Longview warns, however, that it is rare that this initial retest significantly breaches the intraday lows of wave one...

For detail please see HERE...