After being down 6 months in a row to start the year, the S&P500 has been positive the last 4 weeks in a row. From the lows in mid-June, the S&P500 has given us approximately a 17% rally. After 2 full months of relief, it seems I’ve been getting asked a lot (by non-clients) “Is the crash over?”

 

Obviously nobody knows for sure if the crash is over, but I have been reminding people that markets DO NOT move in straight lines. At every second of every day when the market is open, people (and robots – topic for another day) are acting on emotions which trigger the buying and the selling. A stock, like a house, is only worth what someone else is willing to pay for it.

 

Two months ago, enough buyers stepped in when the S&P500 was down 25% as they felt the market was due for a trade higher – we were in that camp and participated a little in the rally. Now the question becomes, was the June low “the low” or just “a low”; recall markets do not move in straight lines.

 

We’re into strong market resistance levels right about here in many of the indexes. I think we’re about to find out if this rally has legs or if we are simply witnessing a dead-cat-bounce (sorry for the visual).

 

Late last week, I added a liquid alternative to hedge the portfolio in the event markets fall. The markets could continue to rally, but good risk management implies being ready for things to change fast. The way I learned it: fix your roof when the sun is shining.