Original title: us stocks have always performed poorly in the fall? Strategists say the stock market is likely to face a 5-8% correction before going higher again.

Source: FX168

Us stocks rebounded sharply from last year's pandemic crash on Wednesday, with the S & P 500 up nearly 18 per cent so far in 2021 amid strong growth in corporate earnings, but LPL Financial, the largest independent securities firm in the US, said it could have a correction of as much as 8 per cent by the end of the year.

Ryan Detrick, chief market strategist at LPL Financial, and Jeff Buchbinder, equity strategist, said in a report: "after rebounding more than 90 per cent from the bottom of the bear market in March 2020, we believe that during August, September and October, when US stocks have generally weakened in history, the S & P; 500 is much more likely to pull back by 5-8 per cent." "however, this is not a bad thing because the stock market may need some kind of adjustment before it goes higher again."

The S & P 500 quickly emerged from its decline in March 2020, hitting an all-time high in August 2020 and rising 16% at the end of 2020. In addition, the s & p 500 has risen 98% in trading through Tuesday (July 27) since it collapsed and bottomed out on march 23, 2020.

"historically, the second year of a bull market can be volatile and frustrating," the two strategists said. After the huge gains in the last nine months of 2020, as we enter 2021, we expect the stock market to have more ups and downs than we have seen this year. " "but in fact, the S & P 500 hasn't even had a 5% correction since October 2020, which is one of the longest records ever, and it's really surprising."

LPL Financial strategists also said they were surprised not only by the lack of volatility so far in 2021, but also by the fact that Cboe VIX, a fear indicator for US stocks, has risen recently but is still down more than 10 per cent since the start of the year.

DataTrek Research, an investment research firm, has also pointed out that history shows that VIX averaged higher on the 26th trading day of the third quarter, while this year it fell on August 6. In addition, VIX usually reaches a second peak at the end of August and the 43rd trading day of the third quarter, which falls on August 25 this year.

History also shows that over the past 10 years (about 2400 trading days), the S & P 500 has fallen more than 5 per cent in five different time points. they are August 8, 2011 (- 6.7%), March 9, 2020 (- 7.6%), March 12, 2020 (- 9.5%), March 16, 2020 (- 12.0%) and March 18, 2020 (- 5.2%). One of the slumps that did not occur at the beginning of the pandemic was in August.