A rally is a series of price increases in shares, indices, or bonds over a short period on the stock market. A considerable boost in demand from a rise in investment generally stokes a rally, and they often follow a period of flat or downward growth.
A rally that occurs during a prolonged period of price declines is called a bear market rally, and this can sometimes be mistaken for an end to the bear market period. However, it is considered a bear market rally only when prices stay underneath the level of the bearish decline.
A rally that occurs in a period of rising prices is called a bull market rally, which is less common than a bear market rally.
How long does a rally last?
The length of a rally will depend on its type. For example, bear market rallies often occur during low economic times and last up to a couple of weeks before heading down to new lows. However, bull market rallies have been known to last between 4 and 11 years.
For example, the Covid-driven crash of 2020 led to a new round of bull market rallies with only four of 12 not reaching 1000 days. Since the Covid crash in March 2020, the S&P 500 has continued to surge by more than 90% over the 21-month period.