If you think a few good days in the stock market signals the end of the big bad BEAR, then watch this video.

I’ve suggested in prior articles that there’s the potential for much more downside, especially as data (months, not days) begins to illuminate just how badly COVID-19, or rather our reaction to it, is damaging the economy.  Here’s an interesting chart I stumbled across that sort of uses the same simple technique I’ve described (and so accurately foretold the depth of the market’s eventual decline in early February).

You’ll note that none of the scenarios takes us back to where we began anytime soon, which I’m afraid is wishful thinking that evidences many out there remain in the ‘denial’ stage. We need a longer term washout before we can even fathom a new bull market.  There is hope however.  Once volatility dies down and investors have accepted the new reality (the press isn’t focused on markets and moves on to some other newsworthy obsession) it’s possible we’ll see 2800 again later this year or early 2021.

My ‘other’ forecasting technique (also simple but reliable) assumes that $140 earnings  (of the three, it’s likely the most robust which suggests profits for the index are 15% lower due to the coronavirus mayhem) is at least possible; if it were an annuity (no growth beyond that) then discounted at 6% (2% risk-free rate with a generous risk premium of only 3%) we get a target of 2800 for the S&P 500 – sometime in the future.