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This chart of SPY shows what are some projections for a continued advance over the coming weeks if the recent lows holds.
This is based on rebounds following some sharp declines into 52 week lows over the last couple decades.
The blue lines represent average MAX gains over 3, 5, 10, and 21 trading days in terms of ATR multiples which bases the projection upon volatility.
That being said, none of the instances in the table below actually gained more than about 23% over the following 1 month. 23% from the recent closing low would put SPY at around $273 which is what the red line represents.
In the comparable past instances a trailing stop of 2 or 3 times the 10 day ATR allowed the gains of the following rally to be captured. The ATR would be anticipated to shrink as the rally continues and volatility shrinks. So that is a wide stop now, but could shrink considerably by 2-4 weeks from now.
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This table shows the dates of the comparable lows that I am making projections off of.
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The chart here is just for historical context in that the 2 most similar historical precedents to our current environment were 1929 and 1987.
1929 had a more sharply angled and less choppy advance that retraced 50% of the crash losses before rolling over again.
1987 had a quick couple day rebound of 15% followed by a sloppy trading range for a year.
Pete
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