Here's a punch to the face of any stock market bear, courtesy of a helping hand of data analysis.
Canaccord Genuity's chief market strategist Tony Dwyer tells TheStreet his "shock drop indicator" suggests the market bottom for the year has already formed. Dwyer summarizes the shock drop indicator, which is a deep dive into human emotion and markets, in his latest client note:
"As a reminder, a shock drop is a correction sharp enough to cause the 10-week rate-of-change (ROC) in the CBOE Volatility Index (VIX) to spike to 125. We found that, historically, every shock drop was followed by a bounce and then a nasty retest of the low as volatility began to decline."
Dwyer believes the latest action in the market off the February lows is comparable to other times there has been a shock drop.
For those fretting over the muted reaction to financial sector earnings from JPMorgan & Chase (JPM) , Bank of America (BAC) and BlackRock (BK) , Dwyer says to relax. The longer term charts on the financials continue to bullish. Further, the economic fundamentals remain solid.
JPMorgan & Chase is a holding in Jim Cramer's Action Alerts PLUS.
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