The context within which a
Let us focus our attention on the
The first thing to notice is that the closed at 4455.48 – up 0,15% on its previous of 4448.98. Studying the day’s movement, you can see that in an intra-day chart like this, the previous day’s close is very important to how the chart unfolds through the day.
The S&P began the day significantly down on the previous close but quickly moved up to test that level before falling back and thening once more to above the previous close. It could not sustain that break and fell back once again to find strong at about 4440 (the blue arrows). It went up again to test the previous close and once again fell back to the support at 4440. Altogether it made three s at 4440 (the three arrows) before rising once more and this time managing to penetrate the previous close. From 12pm until about 2.30pm it hovered just above and below the previous close before finally moving up to its intra-day high above 4460. The final close saw the index just fractionally up at 4455.48.
It is both educational and interesting to watch the progress of the S&P500 through its daily trades. The
Looking more widely, you can see that Friday’s market action (the green
Now let us consider that “mini-correction” in the context of what has happened since the start of the pandemic last year.
RECOVERY FROM COVID-19
We regard thecaused by to be a “ ” event which was caused by factors which were completely outside the and the markets. It impacted markets because business lockdowns temporarily halted all work and because s added enormously to the and that was already out there.
As it become clear that the pandemic was coming under control,
You can see from the chart above, the “mini-correction” shown in the previous chart is at least the 8th suchsince the “V-Bottom” caused by COVID-19.
THE GREAT BULL TREND
Widening the view still further in the next chart, you can see that the COVID-19 “V-bottom” and the subsequent record-breaking upward trend are part of the greatest
In our view, this massive bullmust be seen as the direct result of the unprecedented and continuing monetary and fiscal stimulation which has been applied to economies since 2008.
KEYNES AND GREENSPAN
And then, of course, that monetary and fiscal stimulation must also be seen in the context of the socio-political history of America which has its roots in the Our Background Approach on our website. This document was last updated on 28th August 2020 – just over a year ago. Since then, markets have continued to rise inexorably - as we anticipated.’s response to the 1929 . To get an idea of our views on this, you should read a document which we call
Our advice tohas been to “make hay while the sun shines” but be very aware that eventually the music will stop.
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