How Does the Duration of a Backwardation Period Relate to the Strength of the Subsequent Market Recovery?
There is no definitive, predictable relationship between the duration of a backwardation period and the strength of the subsequent market recovery. A brief period of backwardation might signal a sharp, V-shaped recovery if it's caused by a short-lived panic event.
However, a prolonged period of backwardation could indicate a more deeply rooted bearish sentiment and a longer, more gradual recovery. The context of the backwardation is crucial; its cause, the broader market conditions, and other technical and fundamental factors will ultimately determine the nature of the recovery.