over 1 year ago • 1 min
The S&P 500 dropped about 25% from peak to trough this year, but it’s now at an encouraging point, having recovered just over half of the losses it’s seen in the current bear market. Technical analysts would call this a 0.5 Fibonacci retracement, and many of them see it as a sign that US stocks are heading into a new bull market. That’s because we’ve seen exactly that pattern play out in all 13 of the technical bear markets since World War 2.
Still, even if a bull market is on the way, you can expect it to be a bumpy ride: the S&P has tended to pull back a bit around the halfway mark, trade within a range for a few months, and only then start gunning for new highs. So rather than throwing caution to the wind and diving back into stocks, you might want to settle in for a bit first.
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