October has a bad rep on Wall Street, and rightfully so. This month has seen some of the biggest market swings in history, including Black Monday in 1987 — when the S & P 500 plunged 21.8% for its biggest one-day drop ever. However, this month has also seen the end of more bear markets than any other. Data from the Stock Trader’s Almanac shows that, of the 23 S & P 500 bear markets since World War II, seven ended in October, more than any other month. The majority of Dow Jones Industrial Average and Nasdaq Composite bear markets have also ended in October. What’s more, there are some signs that the end of this bear market could be near. The major averages on Thursday staged a massive reversal, with the Dow ending the session up more than 800 points after being down nearly 550 points to start the day. Bespoke Investment Group also noted that Thursday marked just the fifth time since 1993 that the S & P 500 fell more than 2% in a day to then close more than 2% higher. The benchmark index saw solid gains over the next month in three of the last four instances. Ryan Detrick of the Carson Group also points out that the S & P 500 closed about 5% off its intraday lows and is coming off a 52-week low. “We also saw that in March 2009, December 2018, and March 2020. Hmmm…” Detrick said in a tweet . Thursday’s action “definitely gives the bulls some ammo they have been lacking much of this year. At the very least, this could give some near-term relief,” wrote BTIG’s Jonathan Krinsky. This is “far from an all-clear signal and we aren’t yet ready to proclaim that the worst is behind us,” Krinsky said. Indeed, many of the headwinds hurting the stock market aren’t going away anytime soon. Inflation remains high, and the Federal Reserve doesn’t expect to move away from higher interest rates in the near future.
