The current downturn hit a low of 3,666.77 on the S&P 500 on June 16. We won’t know if that is the bottom of the current downturn for a while (theoretically until we hit a new all-time high) but we will know sooner if a new bull market has begun.
Using a common definition, a bull market is said to have begun when the market has rallied 10% off a bottom. In the case of the S&P 500, that would mean a level of 4,033.45.
Now, just because we enter a bull market that doesn’t mean the market can’t set a new low. Honestly, it doesn’t really mean that much at all. There are no rules to this thing.
But what it does mean is that there is a phrase for some event and if that event happens people will probably write about it and a new narrative will spawn. That narrative will be bullish.
That’ll help provide positive momentum to things. So, because humans are complex and superstitious and like round and neat numbers, that arbitrary 4,033.45 level really does matter in a way. So, stay tuned for an interesting battle to see if this bear can give way to a bull.