The S & P 500 index rose 50% in 100 trading days to the edge of an all-time high, making the rally the strongest in history and, in a sense, ending the shortest bear market in history. < / P > < p > despite several attempts, the S & P 500 index was unable to break through its record closing level of 3386 in February last week. The index has to absorb the mechanical sell-off that traders lock in at breakeven levels, and the profiteers use it as a target and a means to avoid becoming too greedy. < / P > < p > just at this point in the market, professional investors showed more positive optimism than before the outbreak of the epidemic. Crazy buying of call options has pushed the put / call ratio close to a multi-year low. < / P > < p > the interpretation of the National Association of active investment managers on the stock exposure of tactical investment advisers quickly rose to the upper end of the normal range, staying at the level of more than 100, which was very high, indicating that the specialized fund managers linked to performance were basically full of positions. In the face of severe economic pressure, retail investors’ confidence in this round of rebound has declined, but even so, the latest report shows that the net inflow of domestic equity funds in the United States is nearly $5 billion, the highest in nine weeks. As Apple’s market value is approaching $2 trillion, Tesla also announced a stock split, causing its share price to soar. All this shows that there is a kind of complacency in the market. However, such sentiment may make it difficult for the market to rise further easily and put the market in a disadvantageous position to cope with any unexpected situation. From a broader perspective, the stock market rebound in 2020 is very similar to some typical market recoveries in the past. The S & P 500’s trend since its March 23 low contrasts with the strong bottom rebounds of 1982 and 2009, and this similarity is hard to ignore. < / P > < p > even if this comparison has some merits, the current rally is stronger than previous ones in terms of mode, so it should not shock anyone if the rally stalls or the S & P 500 is going to be corrected soon. But one question worth discussing is whether these historical examples are good precedents for today. The U.S. stock market experienced an epic slump in March this year. The S & P 500 index plummeted by 34% in just 23 trading days. This is not so much a typical bear market as an event driven crash.
the intensity and speed of the stock market crash and the immediacy of the massive liquidity and fiscal response provided by the Fed and Congress prevented the typical bear market from purging the market bubble and valuing it lower. In addition, there is no shift in market leadership that usually occurs in bear markets. And, perhaps crucially, not much of the gains accumulated in the previous bull market have been consumed. < p > < p > the performance of the stock market in 2020 is a bit like the crash of 1987, that is, after years of strong rise, there is a dramatic and painful shock, and then it is quickly repaired.