Whilst having one of my regular floats this morning I was pondering the surprise of people that prices after an extended run have a period of contraction, to me this has always been the natural order of things. I understand that various aspects of optimism and recency bias afflict people but it still intrigues me that people feel that the laws of gravity have in a sense been revoked. For my own curiosity I thought I would look at the number of days that the All Ords had risen without a pullback of 10% or greater and I have to admit that I was surprised to see that the current market move was the third longest in recent history.
To generate these numbers I used monthly data so these are not precise to the exact day of the pivot and they are calendar days not trading days – so broad brush stuff. But they give an interesting insight into the longevity of sustained moves and are an interesting piece of history.
