The Instant Recession Begat The Instant Recovery

The Instant Recession Begat The Instant Recovery

#recession #recovery #sentiment #optimism #Bulls #Bears

$DIA $SPY $QQQ $$RUTX $VXX

It took 175 days for the S&P 500 index to go from Top to Bottom to Top, this recovery came faster than any in the past. The prior 12 cycles that saw stocks recover from a drop of at least 20% took an average of 4 yrs.

Since bottoming on 23 March, the S&P 500 has risen about 50%, with more than 40 of its members 2X’ing. About $15.2-T of shareholder value that vanished is now restored.

Wednesday, the S&P 500 rose 1.6% to 3,387.89 passing its 19 February record close. It pulled back in the last 30 mins of trading to end at 3,380, 0.2% shy of the all-time high.

The tech-heavy NAS 100 reclaimed it’s all-time high in early June and has since posted 12 more record highs.

Helping drive the fast V-Shaped recover was monetary and fiscal support, where The Trump Fed pulled out all stops and The Trump Administration /Congress works on a new aid/relief/stimulus package. At the same time, better economic data and corporate earnings instilled optimism that the recovery is happening.

Power breakouts like this 1 augurs more gains. In prior cycles when the S&P 500 broke even following a Bear market, stocks kept rising in all instances. On average, the index added another 71% before Topping out.

Improving investor sentiment will prompt participants to branch out to small and mid-cap stocks, building a stronger foundation for the overall Bull market.

Wednesday, the major US stock market indexes finished at: DJIA +289.93 at 27976.84, NAS Comp +229.42 at 11012.31, S&P 500 +46.66 at 3380.35

Volume: Trade on the NYSE came in light at 771-M/shares exchanged

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bullish in here. The overall support is Strong, the resistance is NIL.

  • NAS Comp +22.7% YTD
  • S&P 500 +4.6% YTD
  • DJIA -2.0% YTD
  • Russell 2000 -5.1% YTD

Looking Ahead: Investors will receive the weekly Initial and Continuing Claims report and Import and Export Prices for July Thursday.

Have a healthy day, Keep the Faith!



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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.