Back in the summer months of May, June, and July, the stock market, measured by the S&P 500, remained in a range around 900 after investors moved from pricing in another great depression to a typical recession. Now, this fall, the S&P 500 has been in a range around 1050 as investors have moved from pricing in a typical recession to a recovery. The recent pattern of performance of the S&P 500 is remarkably similar to what place during the early summer months.

The nearby chart of the S&P 500 compares this summer’s performance (from Aprll 22 through July 31) and the pattern this fall (from September 1 to now). They are nearly a perfect match, with the fall being exactly 150 points higher on the index than during summer. What this suggests is that recent slide may not be the end of the pullback either. An eventual move down of a few more percentage points in the next few weeks may unfold if ….

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