#MarketTiming $SPY – Lost and Stolen Time

At month’s end, it is easy to look back and see this last six weeks has been the most volatile down and up market ever.

Six weeks ago on February 19th, the S&P 500 Index (SPX and its ETF, SPY) was at an all time high, and one month later on March20th it was slammed back into 2017.

It has since had a big bounce and is now trying to claw back into the price levels it was at in 2018.

See the chart below. The blue vertical lines mark the relevant price/date the current SPY prices had fallen back to.

This is, this month, three years lost for anyone who has bought had held stocks in the market generally, and, as of today, two years on average.

Some stocks, of course, have done better than others. MSFT dipped into 2019 but is back into this year’s time frame. AAPL wiped out nearly a year of gains but is now back to its level in November of 2019. There others beside these examples but…

…But the price carnage is much more striking on average. So, so many stock have lost two to three years of the gains in the bull market. FB, GOOGL, are at the levels they were in 2017. A troubled company like Boeing, BA, plunged all the way back 2016 and bounced to 2017 on hope of a government bailout.

I don’t know what’s going on at Goldman Sachs, GS, an important bellwether stock and company, but it has plunged to stock levels seen in 2016 and even with the market’s stellar oversold bounce, it is still there.

And I suppose XOM’s stock price, which managed to wipe out 20 years of gains, and is still lodged at the prices it was at in 2004, may be telling us something about the market in general and its sector in particular. I’ve heard long-term investors proclaim that is a screaming buy but then they are not exactly leaping all over it. Could it be because in this time of climate-change awareness, the tide has turned and not as many investors want to own one of the main practitioners killing the planet, which despite what it’s PR says, doesn’t do much else?

XOM now reminds me of the time GM’s stock price peaked in 1965 and didn’t break even until Bill Clinton was President. It fell again in the Bush Administration, as history tells us, on into the 2008 financial crisis and had to be supported and reorganized by Obama in the face of much Republican opposition. And now under Trump, its low this month took the stock back at its prices in 2012, far below the Obama reorganization. What is it with these so called “pro-business” Republicans?

There are a lot of people wishin’ and hopin” the bull will resume and maybe it will. But me thinks those proclaiming the recent bounce and celebrating a new bull market (six days old) are the same stock holders from the past three years hoping the market climbs enough to break them even and let them out.

As I’ve written in this link below Reading history on the #VIX chart… I think it’s going to take more time than those conditioned by the bullish years under Obama and the the continued advance under Trump.

The gains under Trump were wiped out at this month’s low. It was probably inevitable since it was a market running on loose money, artificially-low interest rates, corporate tax cuts to buy back stock instead of attending to business and Presidential blather. If the Coronavirus pandemic had not come along to usurp Trump’s whining for ever lower interest rates, something else would have – still, it is the virus that has revealed how little leadership ability Trump actually has, the virus does not care about misrepresentations, it does not care about Fox-News misinformation, it does not care about Trump’s outright lying, and it can’t read tweets.

If the governors can’t get control of…let’s just call it the Trump Virus from now on…this bear market could go on as long as Trump fights the effort to care for victims and quarantine all the states. Bill Gates, whose foundation has a lot of experience with viruses around the world. said this week every county, EVERY COUNTY, in the country needs to be locked down until the virus is dead and gone.

And in this link below: Reading history on the #MarginDebt chart I contend this bear goes beyond the virus to the unraveling of margin debt under the surface. When over-extended margin debt (it rose higher than it did in 2000 and 2007) unravels it usually is not done until the S&P 500 falls about 50% — and that has not happened…yet.

This what bear markets do. The market has a bullish bias, having risen repeatedly to new highs throughout American history (remember the Mad Men’s “…X-Y-Z is bullish on America”?).

Bear markets do not, so far, do permanent damage, but they do steal time.

(Click on the chart for a larger view)

2 thoughts on “#MarketTiming $SPY – Lost and Stolen Time

  1. BTW, nice place to end this bounce:
    october 11,2007- march 6, 2009= minus 909.21 points= sqroot= 30.153 + 666.88=697,033=square root=26,4013=2640,13

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