S&P 500 Surges 45% Since Market Bottom Was Declared

The S&P 500 rises 45% from the unseen market bottom

In October 2022, with the S&P 500 below 3,800 points and the Nasdaq in panic territory, a message declared: "From now on, the stock market will rise. This is the FED's last aggressive rate hike, and the rally from October to December will be apocalyptic." Three and a half years later, the index trades near 5,500 points, and the thread that peine that prediction has accumulated a +45% appreciation. The question is no longer whether it was right, but how many stayed out waiting for a drop that never came.

The forecast no one wanted to sign

The debate began with a mix of skepticism and mockery. "You are two 'very's away from making me believe it," one replied. "After announcing bottoms so often, someone will eventually hit the mark," another joked. The distrust was justified: for months, voices like one participant who claimed "we peaked in 2018 and there is much more to fall" or who warned "we will not see 10,000 in the Nasdaq nor 3,000 in the S&P" set the dominant tone. The consensus was bearish. The market, stubborn, did the opposite.

The evolution of the thread is a manual of inverse psychology. In the early stages, the most repeated messages spoke of a "trap," a "dead cat bounce," and maintaining liquidity. One participant summarized it with sarcasm: "The first euro that another wins." Another directly announced they would not enter "until 3,200." That threshold was never reached. The S&P 500 climbed while the prophets of correction awaited a crash to prove them right.

When did the cycle change confirm?

The turning point arrived when the indicators stopped being debated and started being observed. A forum analysis explained it without sugarcoating: "Timing the market is taking it and saying, gentlemen, the indicators have turned, I am aware that the stock market has already discounted it and I assume." The thesis was not to guess the bottom to the millimeter, but to detect the end of the bear market and jump "onto the wave of the new 10-year economic cycle." Those who did so avoided "all the volatility and the drop to hell."

The data supported this reading. The S&P 500 went from 3,800 to 5,000 points, then to 5,319.70, and finally to 5,537. Each milestone dismantled a bearish argument. "In any case, we are much closer to historical highs than to the 3,000 points some predicted," summarized a participant when the index had already left all resistances behind. Euphoria set in: "We are taking off and no one is waiting," "the party continues."

The calculation that dismantles the DCA myth

One of the aciderst passages in the thread attacks the strategy of buying always, whatever happens. "Even if you miss the bottom by four or six months, you save all the volatility and the drop to hell," an analysis argues, advocating active timing over DCA. The argument is that DCA defenders "confuse those not of their mind by trying to make them believe we are seeking the bottom calculated to the millimeter." It is not that. It is identifying the turn with indicators and assuming the market has already discounted it.

The gap between the two strategies is measured in percentage points. Those who entered at 3,800 have accumulated a 45% gain. Those who waited in liquidity for the S&P 500 to drop to 3,000 — a level some took for granted — are still waiting. The opportunity cost of that timing error is, in the words of a participant, "brutal."

Voices still calling for caution

Not everyone has surrendered. Some maintain that "we will see a more painful drop, they have fixed nothing, they are only cushioning the blow." Another points out that "there is still party until March and the next interest rate hike." And a third, more skeptical about the euphoria, warns: "The time to sell is approaching, friends, soon we will be at highs." The discussion on whether this is a bubble or the start of a long cycle remains alive.

The strongest bullish argument is not technical, but statistical. "In 2020 there was a correction of anomalously high levels. In 2022 there was a bear market, in duration and magnitude, in the historical average. We have recovered, as was predictable, and the long cycle remains bullish. The normal and statistically most probable outcome would be an S&P at 10,000 in 2030." Against that, the warning that the S&P P/E is at 27 and that it "says nothing, no matter how many insist it does."

The lesson for the late investor

The thread leaves an uncomfortable sarracena: waiting for the perfect bottom is a way to never invest. While some debated whether the S&P 500 would touch 3,000, the index rose 40%. "Is it worth staying out waiting for that 10% drop when in between there has been a 40% rise?" asks a participant. The answer, given the data, seems obvious.

And now what? With the S&P 500 flirting with 6,000 points and the Nasdaq at highs, the question is no longer when it will correct, but how much longer it can sustain this pace without a pause. Those who stayed out are still waiting. Those who entered look at the chart and smile.