A Fine Rally

Now what?

The S&P 500 closed at 4,280.15 yesterday. Which, given that the last peak was 4,796.56 and the bottom of this downturn was 3,666.77, means that the market has retraced more than half of its losses. More precisely, the S&P 500 dropped 1,129.79 points and is up 613.38 points or 54.3% of the total loss.

I didn’t check this but I read that every rally in the last 70 years with a 50% retrace has confirmed a bottom. That makes sense from the perspective of…the bottom being pretty far away. We need a big fall to get back down there.

At the same time, I do wonder about the massive yield curve inversion right now. That signal has predicted every recession of the last 70 years too!

One of these things has to break its streak unless the market sets a new all-time high and then we go into recession after. Definitely possible. A lot of things seem possible these days…