19 June 2014

S&P 500: Mean Reversion Runs Its Course

As expected, and at least through 17 June 2014, the day before the Fed's next policy statements, the S&P 500 was indeed reverting to its mean:

Or rather, the S&P 500 was reverting to the mean trajectory it has established since order resumed in the U.S stock market after 4 August 2011. But we think that may have come to an end and that the index will begin diverging away from the mean now that we're past the Fed's statements and Janet Yellen's press conference. More on why we're thinking that next Monday....