MNeagle
21st May 2010, 10:58 AM
May 21 (Bloomberg) -- The rally in stocks that began 14 months ago is probably intact if history is any guide, Birinyi Associates Inc. said.
The Standard & Poor’s 500 Index had fallen as much as 12 percent from a 19-month high on April 23 as concern grew that Europe’s sovereign debt crisis would snuff out the global economic recovery. Thirteen of 15 comparable drops the Westport, Connecticut-based firm calculated since 1945 have occurred either at bear market bottoms or during lasting advances.
“If we assume the bull market ended on April 23rd, it would be one of the weakest and shortest gains in the last 48 years,†Cleve Rueckert, an analyst at the research and money- management firm founded by Laszlo Birinyi, wrote in a note to clients today. “A more likely scenario is that the current bull market is experiencing its first official correction.â€
Investors should buy, Rueckert said. In each of the 13 rallies since 1945, the market bottomed and rose to a new high.
The S&P 500’s low yesterday was 8.6 percent below the 50- day average price, a “rare occurrence,†according to Rueckert. The S&P 500, the Dow Jones Industrial Average and nine of the S&P’s ten industry groups are at their “absolute buy prices,†he said, or farther away from average prices than any time in 18 months.
The S&P 500 gained 1.4 percent to 1,086.60 at 11:48 a.m., reversing a drop of as much as 1.5 percent that dragged it below its weakest level during the May 6 market rout that wiped out $862 billion in 20 minutes.
http://www.bloomberg.com/apps/news?pid=20601087&sid=alY5oKJaZSuQ&pos=7
The Standard & Poor’s 500 Index had fallen as much as 12 percent from a 19-month high on April 23 as concern grew that Europe’s sovereign debt crisis would snuff out the global economic recovery. Thirteen of 15 comparable drops the Westport, Connecticut-based firm calculated since 1945 have occurred either at bear market bottoms or during lasting advances.
“If we assume the bull market ended on April 23rd, it would be one of the weakest and shortest gains in the last 48 years,†Cleve Rueckert, an analyst at the research and money- management firm founded by Laszlo Birinyi, wrote in a note to clients today. “A more likely scenario is that the current bull market is experiencing its first official correction.â€
Investors should buy, Rueckert said. In each of the 13 rallies since 1945, the market bottomed and rose to a new high.
The S&P 500’s low yesterday was 8.6 percent below the 50- day average price, a “rare occurrence,†according to Rueckert. The S&P 500, the Dow Jones Industrial Average and nine of the S&P’s ten industry groups are at their “absolute buy prices,†he said, or farther away from average prices than any time in 18 months.
The S&P 500 gained 1.4 percent to 1,086.60 at 11:48 a.m., reversing a drop of as much as 1.5 percent that dragged it below its weakest level during the May 6 market rout that wiped out $862 billion in 20 minutes.
http://www.bloomberg.com/apps/news?pid=20601087&sid=alY5oKJaZSuQ&pos=7