S&P 500 Long, Medium, and Short Term

Starting out from the long term and working our way to the short term, below is a technical analysis of the S&P 500 index. The rally that began in 2003 produced a bull market (defined a series of higher highs and higher lows), that lasted until October of 2008 and resulted in a gain of almost 100% when measured from its low, at about 800, to its high at about 1550. The market went from a bull to a bear market after October 2008, making a trend of lower lows and lower highs. In the summer of 2008, the market crashed into the fall of 2008, followed by a sharp rally, and then another crash that took the index into a low at 666 in early March of 2009. The subsequent rally from early March in the context of the long term looks more like a reaction than a trend. I say that because of the sharpness, almost “panic” buy nature of the rally. It resembles the “panic” sell that preceded it. Of course, this rally can be the beginning of a new bull market. Or it could be a reaction in a longer term bear market. (more)