Yesterday's new "Major Trend Analysis" from the Leuthold Group was accompanied by good news and bad news.
Good news: while bull rallies occur in bear markets, it's almost unheard of for a bull rally to exceed 30% gains and then pull back into a bear. Typical "trap rallies" are in the 20% range. The only (admittedly uncomfortable) other occurrence of 30% rallies that collapsed were during the 85% skyrocket early in the Great Depression.
Bad news: "The blue chips’ bounce has driven their valuations back to levels that exceed all but the March 2000 and February 2020 market tops. If our S&P 500 metrics were to eventually retreat to 'only' the new-era valuation low that accompanied the mild recession of 2001, losses from here would be on the order of 30-35%."
Today's Shiller 10-year CAPE is 26.88, with "normal" being about 16; a sort of mid-point between the average and median values. The 10-year CAPE hit 27 in early 1929, then not again until mid-1996. It stayed at or above 27 for about a decade, declined to the low 20s after the GFC then worked steadily back up. The recent unpleasantness whacked about six points off the average.
David
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Who would have known?
On a sadder note, my sister in the Texas Hill country says people are yelling at her for wearing a mask and she is avoiding certain grocery stores because of the hostile reaction she has had from MAGA wearing customers in the parking lot.
She says "down hear you assume everybody is carrying a firearm"
It is happening elsewhere
https://www.usatoday.com/story/news/nation/2020/05/07/oklahoma-city-mcdonalds-shooting-2-workers-shot-customer/3086975001/
Jesus.
Schools and universities are now closed and they are likely to open in the fall. One can expect many changes will be mandatory including face covering and social distancing. Schools have to be creative on how to ensure 6' distance between the students. Graduation is around the corner and it will be a very different from the past that we all remember.