Big move today in stocks with the S&P500 closing up 7.03 percent.  We are so glad we are out of the market.

We believe stocks are now in phase two of a vicious bear market, where after the initial sharp sell-off, the major indices retrace close to 50 percent of their initial down move.  See the chart below, which illustrates how the Nikkei recovered almost 50 percent of its first big move lower before rolling over again.

The market appears to be reacting to better news on the case and death curves but it is much too early to sound the all-clear.   Italy and Spain have been turning down over the past week (see chart below) so we are a bit perplexed by those touting the market move was a reflection of the green shoots coming out of Europe.

The New York numbers also a little better than expected, thank God.

Hopium is a difficult addiction for markets to kick and it very is clear there is still a ton of it out there.

Four Stages

In early March we wrote about the stages of a pandemic in our post,  Stages Of A Pandemic: Denial, Panic, Fear, and Rationality, moving from denial, fear, and then rationality.   Though we remain in the fear stage, there are signs rationality is starting to take hold but strictly with respect to the existential phase of the pandemic.

Now The Economics

We are still a long way off in restarting the economy and to a full economic and financial recovery.  There is still an awful lot of denial in this respect.

The table lists some key near-term levels, which we will let you ponder.