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Is a deeper correction beckoning for the S&P 500?

At the highs this month, the S&P 500 has doubled in value from the depths of the pandemic in March last year

An interesting chart put out by Bloomberg shows that the S&P 500 might be headed towards a deeper correction some time in the future, after having gained by double its value since bottoming out amid the early days of the pandemic last year.

“Over the past 20 years, a gain of such magnitude always saw the benchmark fall at least 10% from its peak in the months or years that followed.”

Despite the ominous signal, the question as is always in the market, is with regards to timing. And for traders and investors now, are delta variant concerns that pressing and disconcerting to trigger a sharper correction from here?

That’s a tough question to answer, more so when you consider the fact that the Fed’s printing press is still running and easy money is continuing to flow.

If Fed members fail to really ignite any taper sparks at Jackson Hole next week, that’s another tick for equity bulls and dip buyers to disregard the latest drop this week as a mere hiccup given that their conviction remains firm despite a gloomier outlook:

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