Rapid plunges when the economy is still expanding - like now - are typically followed by strong forward returns. Moreover, it is encouraging that emerging markets, which have been the hardest hit by the threat of a trade war, reached a 4 month high this week. Those markets originally bottomed in October and retested those lows in December (a possible basing pattern).
It's certainly possible that some of the rapid gains since Christmas will be given back before SPX moves materially higher. A period of consolidation and retrenchment in the weeks ahead would not be surprising. The trade war isn't the only thing driving the market, but it has clearly been important and further deescalation will likely drive SPX to the top of its October-December range, just as reescalation could plunge it back towards its Christmas low.
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The bounce that started on Christmas Eve took a small pause this week. Still, SPX has gained 13% since the low while the Nasdaq is up 16%. According the Ryan Detrick, this is the market's best January in at least 30 years (table from alphatrends.net). Enlarge any chart by clicking on it.