Who Could Have Predicted This Huge Down Move In The Market?
On November 15, 2019, the S&P-500 reached 3120 for the first time ever. For the next 63 trading days, the S&P continued relentlessly higher, topping on Feb 19 at 3393. Just four days later, the S&P was back down to 3120, almost instantly erasing three full months of gains! Nobody could have seen that coming ahead of time, could they? We know of at least one person who did.
Have We Reached An Unsustainable Situation?
Gold & Bonds are typically correlated. As of this writing, that historic relationship appears to be intact. Compare that to Gold & the U.S dollar. Those two items typically move opposite (inverse) of each other. However, since mid-July 2019, they have generally been moving up and down together.
Bonds, which are the most popular alternative to stock ownership in the investment world, typically move opposite of the stock market. However, ever since the start of the new year (2020), stocks, bonds, gold and the US Dollar have all been rallying together. Is this a distortion that has developed because of mid-October 2019 Fed announcement of QE? Many think so. If so however, there was a delayed reaction of 2.5 months.