Coming off an 11 yr bull and the last 10% run was fluff. But for a 28% rise in 3 weeks coming off the greatest longest bull mkt in history is even more incredible. The biggest black swan in history occurred and where right back to prices 7 months ago. Wow
Nothing surprising. Everything progresses/evolves. Actually, it would be surprising if the speed of such moves, wouldn't change for 50 - 70 years. Like the space industry : ,,We have claimed the moon. Now we're done, - no more progress is needed'' ************************************************************* ,,In 00's, 20% of the volume, to push the price, would be equal to today's 5%'' Algos react faster & stronger. Damn. They react to tweets too. Probably the further down the line, the faster those moves will be. ,,Remember Mike, speed - kills !... - this is what my trainer would always repeat to me, during the training hours '' - Mike Tyson (HFT took it serious . 87 000 000 moves per second.) Big players would say : ,,Confusion kills'' (that's why social networks hires psychoanalytics, those dopamine swings etc. by pressing the >< & funds play with media, to shake off the noobs) So, combining speed with confusion in media. Kumbayah - Holygrail.
More impressive? So far, the numbers tell a differnt story: Dow fell by 11,300 points and has rallied by 5500 points S&P fell 1200 and rallied 600 Nasdaq Comp fell 3500 and has rallied only 1500 Russell 2000 fell 750 points, and has only rallied 280. This retracement is just the Bear taking some profits off the table.
Gotta strongly disagree...the selloff was more impressive. Yet, Nasdaq and a few others have rebounded nicely but the selloff was still more impressive. I could drive home the point and post other global markets but will not bother because I think you can view the charts posted just as easily as I can. wrbtrader
I'm saying the rally is more impressive in the context of we were in huge bubble in prices so i can make a case the s@p should have never been over 2800 max . To buy so aggressively when the mkt was still expensive at 2200 of forward earnings is shocking . I still think we go down to 1800-2000 and go sideways for yrs ala Japan.
Markets dont care about your valuation. If the ATH for the S&P had been a bubble top of say 5000, the S&P would have dropped to 3300 and then rallied back to be over 4000 today. And if it had been at 2500 it would have fallen to 1700 and be back over 2000 today. The ultimate bear market bottom might be absolute though. It might be the same sort of number regardless of what the previous ATH was.
We were definitely not in a price bubble, let alone a huge one. SPX forward PE was around 20 at the recent highs; in Japan 1989, large cap stocks were trading at PEs of 50-100 and the carry on property was meaningfully negative. I do happen to think we're headed there, and the next few years will probably see the largest financial bubble of all time, by some distance - but we aren't even close to that yet.
Actual forward P/E's of the SPX at the highest levels this year were not out of line historically, and certainly not a bubble. If you continue to view them as a bubble, however, and use that as a framework for trading or investing moving forward, you'll more then likely under perform for years like many did from March 2009 forward. Short term you might get lucky trading short or long but as one poster found out recently it's not a free ride you can get caught by the reverse tide. If you are going to make a case that US indexes were expensive on a fundamentals basis, then the flip side is true for many quality companies. There were handfuls of Canadian blue chip companies that had P/Es in the 2-8 range at various points in March ( the 2s were in struggling sectors ).
I'm just making a comment . We had very little to no earnings growth the previous 12 months with a 20 p/e. I could care less as i'm stone cold day trader of 31 who just ripped 7 figs out of the mkt the past 5 weeks. If it goes up down or flat it matters little to me .I never argue with the market .