After the Fed’s midday announcement that, despite earlier hints to the contrary, its monthly $85 million purchases will not be pared, prices soared. Consequently, the recent speculative surge paid-off.
The Fed made this good news for higher stock prices even better by stipulating the economic targets to be achieved before tapering down. These goals of unemployment at 6.5 percent and inflation no higher than 2.5 percent are far from around the corner. Currently unemployment hangs above 7 percent and inflation remains below 2 percent.
Considering this market’s profile in view of the recent strong advances, note that at today’s close the S&P500 reached 255 percent of its last low in March 2009, some 1,140 trading days ago.
This is not an extravagant position in view of the last two bull markets. The 2003/2007 expansion stopped at day 1,154 -after recovering 196 percent of its bottom’s low. The earlier 1996/2003 cycle’s 1,059 days was shorter yet had regained 254 percent before it ended.
Today’s diagram displaying this remarkable consistency, allows comfort in terms of the strong gains of the current market. But it raises a flag of caution on its longevity, being just 14 days short of the longest, most recent bull market.
DJIA .95 percent
NASDAQ 1.01 percent
S&P500 1.22 percent 
