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After the Dow's best 3-day streak since the 1930s, here's what experts think the stock market will do next

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Brendan McDermid | Reuters

The United States just experienced the shortest bear market in history, at least for the Dow Jones Industrial Average. That's based on the technical definition of bear markets. Still, experts caution that the coronavirus sell-off may not be done.

The longest-running bull market ended and the bear market began for the Dow average on February 12 when this benchmark last hit an all-time high. By March 23, the Dow had tumbled as much as 37% to the lowest level since late 2016, before surging more than 20% in a span of just three days. Gains of at least that amount are sufficient to be considered the end of a bear market.

The implication could be that the sell-off is largely, finally, over — and that may not be the case. We need some more time to see if the latest rally sticks, and if the market truly bottomed on March 23. As of now, it's on track to be the fastest bear market in U.S. history, clocking in at just over one month. Bear markets, on average, last 13 months.

Through Thursday, the Dow surged 6.4% to cap off its best three-day stretch since the 1930s, increasing more than 20% in that time frame. The S&P 500, another important market index, nearly matched it. That gauge remains in a bear market, however, at least for now. Both gauges rose more than 3% on Monday.

The market's charge came even despite some bleak economic data, as the coronavirus outbreak has led to unprecedented job losses. Thursday's unemployment numbers for the week of March 21 showed a record-breaking 3.3 million people filed for benefits, smashing the record of 695,000 set in 1982. And economists currently estimate another 3.3 million will file for these benefits in the week ending March 28, while central bankers have estimated the unemployment rate could spike to as high as 32%.

This begs the question: Is the bear market really over? Here's what some experts think.

Many investors are shrugging off concerns

Investors, in a surge of optimism, shrugged off the unemployment-related concerns and have ushered in more huge days for the market. Chris Cook, president of the financial firm Beacon Capital Management in Dayton, Ohio, says that investors were feeling particularly good about the government taking steps to shore up economic stability.

Specifically, Cook is referring to the $2 trillion stimulus package — the largest such piece of legislation in American history — that President Trump signed late Friday. 

"It's absolutely enormous," Cook says. That President Donald Trump's signaling that the economy could effectively "reopen" in a matter of weeks, not months, has investors feeling good, he adds. Self-isolation is unlikely to end soon, however, experts say. Indeed, over the weekend Trump announced that social distancing will continue through April.

Still, those projections and signals are "what people are looking at, and they're trying to project when the [coronavirus situation] will start to wind down," Cook says.

'The market always looks ahead'

Experts say not to get euphoric about one good week in the market. The pandemic and its effects on the economy could drag the markets back down in the coming weeks.

"The market ignored the unemployment claims data, but as the market gets higher and the bounce continues, the corporate news is going to get worse, and it's going to be harder to ignore," Scott Redler, chief strategic officer at T3Live.com, told CNBC

Redler added that the market has a long way to go before it regains all the ground it lost. "We were 35% off the highs and now we're 20% off the lows," he said.

For the average long-term investor, the best thing you can do, assuming your financial situation allows for it, is to stick to a strategy of regular saving and investing. If you're able to, now can even be a good time to bolster your portfolio and take advantage of dollar-cost averaging. Lower stock prices could mean you get more for your money. 

The bottom line for Cook is that many traders — both abroad and internationally — are increasingly positive. "The market always looks ahead," he says.

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