Seven months ago on 20th September 2019, the S&P made a new record high at 2930 – and from that level began a correction. Corrections are completely normal and even healthy events which occur regularly during the course of a bull trend. This ten-year bull trend began on 6th and 7th of March 2009 when the S&P made an intra-day low of 666.79 on 6th and then made its lowest close at 676.53 on 7th.
The fall in the market, before this bull market began, had been caused by an American banking crisis which later became known as the “sub-prime crisis” when Lehman Brothers collapsed. What followed was an inordinate monetary policy stimulation of the world economy during which more than $12 trillion worth of quantitative easing (QE) was done to try to avoid a repeat of the Great Depression of 1929.
Ten years later we can say that the QE was eventually successful and the world economy has finally turned around – but not without some very scary moments such as the Greek crisis during which it looked as though the entire European Union was in danger. Read More