Check this out: The recovery since March 23 continues to look like the recovery from the March 2009 low in terms of both price (at top) and breadth (below). #SPX #SP500 pic.twitter.com/gQZGvRFO5V
— Jurrien Timmer (@TimmerFidelity) August 10, 2020
Today’s Chart of the Day was shared on Twitter by Jurrien Timmer of Fidelity (@TimmerFidelity). As of today’s close, the S&P 500 is up 50% from the March 23rd low and within 1% of an all-time high. Jurrien points out that this recovery rally looks very similar to the recovery from the March 2009 low, in terms of both price and breadth. As we discussed on Friday, the fact that price and breadth have begun to diverge has caused some concern that we’re due for a decline. Interestingly, breadth was also diverging in 2009, and yet price ultimately resolved higher. Analog charts like this can be tricky because we know history doesn’t repeat exactly. But it’s worth noting that a breadth divergence following a major cyclical low is not always the bearish signal that some think.