Huge Rally: S&P; 500 Up 2.50%
Daniel Drew, 12/18/2014
Today, the S&P; 500 went up 2.50%, with a full 1% ramp in the final hour thanks to the Fed. How often has this happened historically?
If we take a look at the daily changes in the S&P; 500 since December 2008, we'll see that the market has gained 2% to 3% 42 times, or 3.25% of the time. The odds of getting 3 of a kind in poker are 2.11%. These are low odds, but it's not entirely inconceivable for the market to go up 2% or for a poker player to get 3 of a kind. Anything beyond 3% or 4% in the S&P; 500 is truly historic. Also, this is just a recent study. It does not include the wild volatility of the 2008 crash. So it doesn't make sense to get too excited about a 2.50% day in the market even though it was the best day since January 2, 2013. However, what is noteworthy is that yesterday was also a large day. In the past 2 days, the S&P; 500 is up 4.50%.