This might be the top of a bear market rally indicator, but I don’t care. No charts here indicate negativity. There are a lot of price actions that look like they will break down but turn out to be mere consolidation. Would this time be similar as well? 3-month consumer sentiment since 1960s and the corresponding price action on the S&P 500. Seth Golden provides the data of what happens after stocks as a basket corrected downwards but rebounded at least back to 50% of the fall. Sentiment Trader shows us the historical return after the following sequence:

1. A 20% drop
2. 90% of the S&P 500 members close above their 50-day moving average

Short-term results are a bit mixed, but the returns can be astounding longer term. That is… if you ignore the Great Depression periods....