Prices finally moved higher but today’s rebound recovered just a fraction of the large losses suffered over the previous days. Yet the uppermost concern is not on daily price changes, no matter how large, but on the more important focus: will this bull market continue or are prices now trending down.
Now at 1,234 days since the last market bottom, this expansion’s age deserves notice. It is the longest, outlasting the 1,154 and 1,059 bull markets that topped in 2007 and 2000.
Yet our comparison of these three periods shows a significant difference between today’s price changes and those occurring at the end of the two earlier growth tops. Consider the diagram; it plots S&P500 prices near market highs as the proportion of those highs.
The current market approached its highest price on January 15 gradually, whereas the S&P500 jumped sharply before both the 2000 and 2007 tops.
Similarly, recent price declines are shallower than after the two previous bull market highs.
However, the sharp mark downs of recent days bears an acute resemblance to the steep drop following the 2007 top.
DJIA .47 percent
NASDAQ .86 percent
S&P500 .76 percent
