Courtesy of Doug Short
The S&P 500 opened the day up fractionally and began surging in sync with Bernanke’s morning address to the House Committee on Financial Services. His remarks were interpreted by many as signaling QE3, a new round of quantitative easing. But after a mid-day gain of 1.36%, the market’s enthusiasm began to wane, and the index closed with a more modest gain of 0.31% (which does put it back above the 50-day moving average). The index is now up 4.78% year-to-date and 3.37% below the interim high set on April 29.
From an intermediate perspective, the index is 94.8% above the March 2009 closing low and 15.8% below the nominal all-time high of October 2007.
Below are two charts of the index, with and without the 50 and 200-day moving averages.
For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.
For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.
These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.
