Despite Last Week's Decline, The Markets Are Still In Their Trend - John Rothe | Portfolio Manager, Quant, Tech Geek, And Sometime Superhero To My Kids

Despite Last Week’s Decline, The Markets Are Still In Their Trend

I’ve noticed the “talking heads” on the major financial channels have been raising the question “Is this the start of a major decline, or is it just temporary?”.

While, like I mentioned in yesterday’s post, the fundamentals of the global economy continue to look weak, investors are still hoping the Fed can extend the current cycle.

Short term, the S&P 500 bounced off the longer term trend that was established at the low of 2009:

The current “bounce”

Long term trend

The trend that has been in place since 2009 is my so-called “line in the sand”. If the market breaks the trend it will be an indication that investors believe that the Fed can’t keep us out of the global slowdown.

One last thought: This time of year is historically strong for equities. IF the markets are going to break the trend, it may not be until after the New Year.

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