The S&P500′s gain of a mere .05 percent could be a early warning that prices are at or near the top of this current bull market. Our diagram shows that 11 such closes happened in the fifty days before the market’s peak of October 2007. Similarly, 6 of these small upticks took place in the fifty days before the 2000 top.
That these small changes happen infrequently is demonstrated by the fact that only 94 of the 1,738 positive closes since the beginning of the century are in this zero to plus .05 percent range. That comes to just 5 percent or once every twenty trading days.
With six of these small, less than .05 percent gains, occurring in the 100 days before before the 2007 top, their frequency comes to 6 percent. While that’s not a lot more, it nevertheless is 20 percent more than the average rate over the last 13 years.
The comparison becomes more forbidding when using both gains and losses in the .05 percent range. In total, these occurred 165 times over the 3,289 closes in this century. But these happened 11 times in the 100 days before the market’s 2007 top, a frequency of 11 percent, more than double the average ratio.
DJIA .05 percent
NASDAQ -.10 percent
S&P500 -.05 percent
