Today, 26 trading days after the latest high in April, prices remain nearly unchanged. This continuation is very different from previous encounters with market tops. Consider their different time paths as shown in today’s diagram. When the two earlier bull markets ended, in 2000 and 2007, prices fell by ten percent in the first 30 days. The current pattern is substantially different, with prices remaining near their April high.
This variance could mean that the current market has not yet run out of steam, that the current price stability means the bull market still has not reached its top. Such a conclusion seems unlikely with this expansion now celebrating its 1300th trading day since the last market trough in March 2009.
Nevertheless, it could also mean that a secular reduction in daily volatility – which would be expected given the advances in computer technology that enables rapid reaction to price changes and investor expectations.
DJIA .20 percent
NASDAQ .50 percent
S&P500 .15 percent
