Letâs examine the S&P500âs market capitalization as a percent age of GDP. Last week, the S&P500âs market capitalization represented 69.79% of GDP, almost matching the 69.58% of GDP where it closed in September of 2002, just prior to the October bottom. One of the key differences between the current Bear market and the 2000-2002 Bear was that the correction came from significantly higher valuations. As a result of that difference, it took half the time to reach the prior trough. While nobody could or should call for the trough in this cycle to be identical, it is another sign that the necessary margin of safety is being priced into this market for todayâs buyers.
Those that fail to learn from the past (or disregard it) are destined to repeat it. Snatch the pebble from my hand, grasshopper.
I believe based on the data I am seeing right now that in overall there is still no clear of bull trend where any trader can trade long in S&P500. I will wait until there is a strong bull confirmation of the market which can "possibly" happen next month or the next 2 months from now. As you examine the 50 day Moving Average and 200 day moving average of the index; MA50 is getting close to MA200 so the gap between the two is getting smaller. The current trading range or previous bull situation is getting weaker. Only when MA 50 starts to climb up away from MA200 where the new bull trend starts to clearly appear. This is a good timing for long trades that can also last long. It may look bullish now, but I won't do any long trades, it is because it appears now that the price is previously high and then it tends to go down. I will wait until it hits the bottom and then climb back again. My website: <a href="http://www.stock-trading.me/">Online stock trading tips including S&P 500 analysis</a>