You can see from the S&P 500 chart below, that recent market pull-backs have been limited to draw-downs in the 4 or 5% range. I also want to point out that the 120 Day Moving Average line has acted as support in each decline. Will this time be the same?
Many sectors of the market have been hit very hard. The market indexes have masked much of the carnage going in various market sectors, i.e., the small cap stocks. The Russell 2000 (small cap index) has declined about 11% from its recent highs, but more that 50% of the index stocks have declined more that 20%..
The US is clearly the best performing economy in the world. While Europe is close to another recession, the US continues to grow, all though at a slow rate.
Today's reversal has given me the confidence to begin increasing our equity and bond exposure.
(Click on Chart for Easier Viewing)
|If history repeats itself, the rally will now resume.|
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