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Daily Report : Correction correlations are not encouraging

Jason Goepfert
2025-03-31
Over the last two weeks, the S&P 500 fell into a correction, rebound, and then mostly failed. The most correlated reactions to corrections since 1928 have shown that this is not a favorable pattern for longer-term returns. When the S&P performed the least similar to the last two weeks, returns were significantly better.
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Headlines

Correction correlations are not encouraging: Over the last two weeks, the S&P 500 fell into a correction, rebound, and then mostly failed. The most correlated reactions to corrections since 1928 have shown that this is not a favorable pattern for longer-term returns. When the S&P performed the least similar to the last two weeks, returns were significantly better.

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Smart Money Confidence: 80% Dumb Money Confidence: 36%

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Research

Correction correlations are not encouraging

By Jason Goepfert

BOTTOM LINE
Over the last two weeks, the S&P 500 fell into a correction, rebound, and then mostly failed. The most correlated reactions to corrections since 1928 have shown that this is not a favorable pattern for longer-term returns. When the S&P performed the least similar to the last two weeks, returns were significantly better.

FORECAST / TIMEFRAME
None

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% Showing Pessimism: 37%
Bullish for Stocks
Inverse ETF Volume
Smart Money / Dumb Money Confidence Spread
NYSE Up Issues Ratio
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NYSE High/Low Ratio
Short-term Optimism Index (Optix)
S&P 500 Price Oscillator
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S&P 500 Down Pressure
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% Showing Excess Pessimism
VIX
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Risk Appetite Index
AAII Bull Ratio
AIM (Advisor and Investor Model)
Mutual Fund Flow (no ETFs)
CSFB Fear Barometer
% Showing Optimism: 14%
Bearish for Stocks
Rydex Ratio
Rydex Money Market %
SKEW Index
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Equity / Money Market Asset Ratio
AAII Allocation - Stocks
NYSE Available Cash
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