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The S&P 500: The Friday Bounce

May 6, 2011

After a morning rally, the S&P 500 closed the day up 0.38%, but the week down 1.72%. Interestingly enough, the index soared at the open and by late morning had risen to a gain of 1.44%. The monthly employment report was no doubt a key driver for the rally. But the afternoon saw a selloff of most of the gains.

The index is 98.1% above the March 9 2009 closing low but 14.4% below the nominal all-time high of October 2007. Here are two charts of the index — with and without the 50 and 200-day moving averages.

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Posted Image
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For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.

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