Stocks just had their biggest 50-day rally ever — here's what they did next after similar gains

• Stocks just posted their best 50-day rally in history, with the S&P 500 soaring 40% from its March 23 low.
• Similar sharp and swift rallies in stocks have preceded the start of a new bull market, according to LPL Financial's Ryan Detrick.
• According to Detrick, "Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish."
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Stocks just posted their best 50-day rally in history, LPL Financial's Ryan Detrick said on Thursday.

The S&P 500 index is up 40% from its March 23 low, easily surpassing previous swift rallies, and marking the best rally since the S&P 500 moved to 500 stocks in 1957, according to Detrick.

The recent rally in stocks also surpassed the previous 50-day market record, which happened in October 1982, when the S&P 500 soared 35.6% in 50-days.

Detrick observed that strong 50-day rallies have often preceded the start of new bull markets, and ensuing six-month and 12-month returns have been strong.

Read more: A $40 billion wealth-management firm says the US economy is only 19% recovered from the pandemic — and lays out a winning investing strategy in the wake of a massive stock-market rally

"Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish," Detrick said.

Looking six months out after strong 50-day rallies, the S&P 500 was positive 100% of the time and on average returned 10.2%.

Looking 12 months out after strong 50-day rallies, the S&P 500 was positive 100% of the time and on average returned 17.3%.

While Detrick remained cautious on stocks in the near term due to elevated sentiment indicators like the put-call ratio, he did conclude that the strong 50-day rally gives reason to expect stocks to be higher one year from now.

Detrick isn't the only one who thinks stocks can continue to move higher despite the strong rally.

JPMorgan recently provided five charts to explain why it thinks the stock market can continue higher.

And Stifel, which correctly called the mid-March low in stocks, said it expects the S&P 500 to hit 3,250 by the end of August.

The S&P 500 traded down 0.33% to 3,112 on Wednesday afternoon.