Prices continue on hold as the market changed direction for the third straight day. This continuing instability, at day 1,063 of the current expansion, is a good sign. First, because the 2000 market topped out at day 1,059, and though the 2007 peak happened at day 1,154, risk avoidance dictates vigilance.
Second, because steady gains preceded the previous declines. In 2000, there were three and four day positive runs before prices drifted down. The 2007 highest price saw sequences of two, three, and five day advances.
Our diagram comparing these three expansions reveals today having more similarity with the 2007 than the 2000 profile of the S&P500. If this parallel continues, expectations of a longer bull market are reasonable.
Note a developing parallel with 2007: then price declines were shallow and remained near their peak for another 100 trading days. That is vastly different from the precipitous drop in 2000.
Note though the one similarity in the two earlier expansions: both remained in a narrow trading range for a while, at this stage, before taking two different directions.
DJIA .14 percent
NASDAQ .69 percent
S&P500 .27 percent
