Chart of the Day - Monday, August 10th, 2020

Today’s Chart of the Day was shared on Twitter by  Jurrien Timmer of Fidelity (@TimmerFidelity). As of today's close, the S&P 500 is up 50% from the March 23rd low and within 1% of an all-time high. Jurrien points out that this recovery rally looks very similar to the recovery from the March 2009 low, in terms of both price and breadth. As we discussed on Friday, the fact that price and breadth have begun to diverge has caused some concern that we're due for a decline. Interestingly, breadth was also diverging in 2009, and yet price ultimately resolved higher. Analog charts like this can be tricky because we know history doesn't repeat exactly. But it's worth noting that a breadth divergence following a major cyclical low is not always the bearish signal that some think.