With the S&P 500 Index now up more than 30% from its low, the curious question of ‘is this still a bear market or a bull market correction?’ arises.

From the offset it appears as though the S&P is undergoing a bull market correction, fading away the dip we have witnessed due to the impact covid 19 has had on company performance. It could be said that the dip we have seen in the index throughout the covid 19 period is the ‘complete pricing in’ of the impact covid 19 can have on company performance, hence the rebound we are seeing now. However, this is not the case at all.

It is evident from the image above that the S&P 500 index is being carried by rising Amazon share prices, if you remove amazon from the S&P 500 index, it actually shows a second leg down of bearish movement. The correction seen in the index is likely due to this surge in amazon stock buying and possible a dead cat bounce from heavy selling.

With the majority of countries under lockdown, people rely on Amazon for good and produce. This demand has been reflected in its rising share price.

A pullback in Amazon share prices could send the S&P 500 tumbling lower, keep an eye out for this possibility. It is likely companies will continue to suffer during this period.