After the market closed, the Bernank spoke and was extra dovish. The upshot is that most asset classes have rallied, in particular the stock market where the futures currently put us back above 1660.
As you may recall, back in May I quoted John Hussman, who noted that at important market peaks (think 1929, 1987, 2007), what often happens is that there is a relatively quick 6% to 10% puke, followed by a move back up that quells concerns and suggests that everything is a-okay again, but without actually making a new high.
What have we seen?
On 5/22 the S&P 500 peaked at 1687.18, and over the next four weeks we saw an 8% correction down to 1560.33. Subsequently, the market has been fighting, gaining back roughly 80% of the ground that was lost (as of this writing).
So far, the Hussman roadmap is playing out pretty well. Obviously what we’re watching for though is whether the May high holds.
