Putting Yesterday's Historic Rally Into Context

Offering up a minute-by-minute chart of yesterday's frenzied rally

Managing Editor
Jan 25, 2022 at 2:08 PM
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Last night's record-setting rally happened so fast, we didn't really have time to unpack it all. And some of the luster was lost not 12 hours later, as the futures market resumed their selloff. 

The craziness of Monday, Jan. 24 should not be forgotten though, especially as 2022 shapes up to be a dramatically volatile period fraught with policy, partisan, and personal divides. With that in mind, let's unpack just how insane yesterday was, on a macro scale. Hopefully, we can return to this context-laden piece with some quantitative analysis down the road.

The Dow Jones Industrial Average (DJIA) snapped a six day losing streak, which was its longest since February 2020. The 1,214-point reversal was the first of its kind. From a percentage standpoint, it’s the first time since March 2020 the Dow was down 3.24% or more and turned around to finish higher. This percentage reversal has occurred six times since 1987; twice in 1987, once in 2008, 2020, and now. 

For the S&P 500 Index (SPX), it was the first time since Oct. 23, 2008 the SPX was down by at least 4% and finished higher. This has been done now only three times, both occurrences coming in October 2008 around the peak of the financial crisis. The SPX also briefly entered correction territory for the first time since March 2020. Given Tuesday's losses, the S&P 500 now has had the fastest decline of 10% to start the year of all time.

Looking at the Nasdaq Composite (IXIC), it was a 4% reversal into the black for the first time since Nov. 13, 2008. Stepping back a bit, last week was also the S&P 500 and Nasdaq's worst week since March 2020. 

DJIA SPX IXIC

The small-cap Russell 2000 Index (RUT), down 2.8% at the low, entered well into bear market territory, before rallying itself to 2.29% increase for the session. This was the first time since such a reversal occurred since, you guessed it, March 2020. 

Popular growth staple Ark Innovation ETF (ARKK) was down 9% in the morning and finished up 3% on the day.

And lastly we come to the CBOE Market Volatility Index (VIX), which roared to as high as 38—its highest levels since November 2020 – before settling just below 30. The "fear gauge" is heading toward longest daily win streak since Oct. 2020, and its first four-week win streak since March 2020. 

RUT VIX ARKK

 
 




 
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