SPX 2020: CoviDebt Reset. History says markets should fall >50%?
- 2020 The Great CoviDebt Reset sees markets initially drop by -36%.
FED pushes market back up by +33%, right near the monthly 20 EMA level. CB intervention continues to push markets higher which further widens the gap between the markets and economic reality.
The last two major pullbacks during the 2001 tech bubble and 2008 global financial crisis saw >50% declines but 2020 has only seen a drop of 36%, thanks to the FED yet again stepping in with the largest stimulus in history. However, onlynusing the >50% declines in 2001 and 2008 as reference points implies we could see an additional 25% leg down from the March 2020 lows.
Will the FED win in restoring total confidence in the face of creating the largest spread between markets and reality or will history intervene and see a >50% decline?
