Today’s losses, offsetting some of yesterday’s gains, seem an extension of the five-day decline by the DJIA and the S&P500. Though the NASDAQ closed just short of its September 18 market high, the S&P500 has now declined to its lowest price in the seven trading days since that top.
The profile of the current market reveals many similarities to the waning days of the last two bull markets. Consider our diagram. It shows the last 50 trading days before prices turned down in 2000 and 2007. For ease of comparison, these data points are not dollar numbers; instead, to provide a common basis, they are stated as the proportions of their respective highs.
For the basis of the current market profile, we use the most recent S&P500 high -of Wednesday a week ago- putting today’s close seven days past the previous bull market tops.
Though simplistic, and short of in depth analysis, these mirror images of market tops catch our attention. Indeed, with the current expansion now in its 1,146th day, while these earlier bull markets ended after 1,059 and 1,154 trading days, the outlook for still higher prices is far from certain.
DJIA -.46 percent
NASDAQ -.15 percent
S&P500 -.44 percent
