The DJIA closing at 15056 continues to reach new highs, and the NASDAQ and the S&P500 closed up for the fourth straight day. All this happening while the economic indicators lack the vigor usually seen when the nation’s business situation is improving seems contradictory.
Of course the often-cited fact is that the stock market leads the economy. Thus, the on-going stock rally is forecasting good times ahead, and, in this interpretation, the current gains are indicators of an improving business situation.
With prices continuing their march to new highs, we nevertheless, need to put this rally in historical perspective. Today is the 1,046th trading since the market started its current recovery in March 2009. While mature, this expansion is still not as old as the previous two bull markets. The 1996/2000 market lasted 1,059 days and the one that ended in 2007 endured for 1,154 days.
Today’s diagram profiles these expansions; it shows the S&P500 closing prices for the 100 days before these rising markets hit their peaks. We are not suggesting that today’s market is copying these earlier tops; we are simply putting the current market in an historical perspective.
DJIA .58 percent
NASDAQ .11 percent
S&P500 .52 percent
