Market Outlook - December 2020: Year-end path and beyond
We approach year-end 2020 in the last 1/2 of a path followed since May 2020. At that point using weekly data and Price Percent Oscillator (PPO) an event triggered for comparison using previous large scale market declines over the last 100 years. A series of charts have been published monthly following progress since May.
We are now entering week 29 of 52 after PPO crossing in May following the March 2020 low. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +18.96% after week 28
* 2020 as 15th event: +25.16% after week 28
Note the chart's "Start" yellow arrow for comparison at the PPO/Signal crossing event on 5/18/2020 (at bottom).
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow at May 2021.
The current recovery has reverted to trending above average and now compares most with several of the 14 prior events. In particular, two events trace a similar path from start to week 28: 1970 and 1921. Those two and 2020 are also close to the average path for all 14 events. The following are most similar to 2020 among all 14 events:
Year, Week28, Week52
1921, 27%, 49% (similar path)
1932, 26%, 86% (outlier)
1970, 25%, 27% (similar path)
1974, 29%, 27%
1982, 48%, 58% (outlier)
2009, 30%, 42%
2020, 25%, tbd
Average, 19%, 34% (all 14 events)
If the path follows history, then downside after 52 weeks is limited and upside is moderate. The two most similar, and the overall average for all 14, are consistent with the charted path to May 2021. Additional Fibonacci levels are shown using retracement from 2020 peak to low in March.
We are now entering week 29 of 52 after PPO crossing in May following the March 2020 low. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +18.96% after week 28
* 2020 as 15th event: +25.16% after week 28
Note the chart's "Start" yellow arrow for comparison at the PPO/Signal crossing event on 5/18/2020 (at bottom).
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow at May 2021.
The current recovery has reverted to trending above average and now compares most with several of the 14 prior events. In particular, two events trace a similar path from start to week 28: 1970 and 1921. Those two and 2020 are also close to the average path for all 14 events. The following are most similar to 2020 among all 14 events:
Year, Week28, Week52
1921, 27%, 49% (similar path)
1932, 26%, 86% (outlier)
1970, 25%, 27% (similar path)
1974, 29%, 27%
1982, 48%, 58% (outlier)
2009, 30%, 42%
2020, 25%, tbd
Average, 19%, 34% (all 14 events)
If the path follows history, then downside after 52 weeks is limited and upside is moderate. The two most similar, and the overall average for all 14, are consistent with the charted path to May 2021. Additional Fibonacci levels are shown using retracement from 2020 peak to low in March.