There was a monster stock rally today (11%) and the VIX actually pulled back from 70 to 55! Can we see the light at the end of the tunnel or is it just an approaching train? Taking a look at the Dow-Jones Industrials, what has happened after a single day rally of 7% or more? The table above summarizes the results for the close one, two, five, and ten days after purchase. There does not seem to be any real bias up or down over the periods examined. The two day hold returns an average of 1.56%, but it is not quite statistically significant. The variability of the results is high and there have been very good and very bad results in the past. Be careful out there.
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