By Mark Hulbert
Strong one-day rallies are far more common in weak markets
After the stock market's huge rally on March 31, plus another up day on April 1, discussing a correction might seem overly pessimistic. But in fact, strong single-day rallies like the one earlier this week are far more common in weak markets.
If the stock market's recent decline turns out to be no worse than a garden-variety correction, the S&amp;P 500 SPX will hit bottom on May 21 around the 6,000 level.
That's assuming the length and depth of any correction will match the average of all S&amp;P 500 corrections since 1928. On that assumption, after hitting its late May bottom, the stock market will rebound - and by Oct. 12, it should surpass its Jan. 27, 2026, all-time closing high.
These specific timelines are illustrated in the chart below, which reflects the Nasdaq Composite COMP since its creation in 1971. The red line - at the 24.8% mark - shows the percentage of days since then that occurred during one of the major bear markets in the bull/bear calendar maintained by Ned Davis Research. Notice that a far higher percentage of big one-day rallies occurred during one of those bear markets - in the 60% to 80% range.
Your perspective in this discussion hinges on whether you're a long-term investor or short-term trader. For long-term investors, corrections are nothing more than a cost of doing business. Having to wait six months until the market is back at all-time-high territory (which will be the case if the correction is average) is a small price to fully participate in the stock market's long-term uptrend.
Short-term traders will lament that, even if this correction is no worse than average, the stock market will shed 10% and you'll have to wait until October to be made whole again.
Regardless of your perspective, you should know that there is significant variation in the sample on either side of this historical average. As you can see below, S&amp;P 500 corrections over the past century have been as short as 13 days and as long as 531 days (18 months). Subsequent recoveries to new all-time highs have been as quick as 22 days and as slow as 589 days (19 months).
This discussion so far has assumed that U.S. market weakness will bring no worse than a typical correction - a decline of 10% to 20%.
If it is worse and this is actually the start of a bear market - and its length and loss are equal to the average over the past century - the S&amp;P 500 will bottom nine months from now, on Jan. 2, 2027, at 4,429, for a loss of about 30%. And the market's subsequent recovery won't surpass the Jan. 27, 2026 record high until April 2, 2031.
That is definitely a scarier prospect. Fortunately, bear markets are less frequent than corrections. Of the greater-than-10% declines in the S&amp;P 500 since 1928, 39% represented the start of a bear market. So there may be some solace in knowing that, based on these numbers alone, a bear market probably isn't beginning.
Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com
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-Mark Hulbert
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-04-26 0950ET

IUSV

The S&P 500 is projected to hit a bottom around 6,000 by May 21, assuming a typical correction of 10-20%. Following this, a rebound is expected by October 12, surpassing the all-time high from January 27, 2026. However, if the decline is more severe, a bear market could see the index drop to 4,429 by January 2, 2027, with recovery not expected until April 2, 2031. Historical data suggests that bear markets are less frequent than corrections, providing some reassurance to investors.

- Strong one-day rallies are more common in weak markets, indicating potential market corrections.  
- If the current decline mirrors average corrections, the S&P 500 could bottom around 6,000 by May 21, rebounding to reach new highs by October.  
- In contrast, if this decline signals a bear market, the S&P 500 may fall to around 4,429 by January 2027, delaying recovery until April 2031, although bear markets are less frequent than corrections.

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The S&P 500 could hit bottom by May - and 6,000 is the stock market's correction floor