And everyone is still crying and hoping for more double digit returns in 2015, the last 2 times this happened was 1990-1997 and from March 2003 until the financial crisis in 2008, this is the 3rd longest time in history that this market hasn't corrected.....
1990-1997 was the dot Com boom, which we all know what happened in 2000, the markets collapsed, in 2002 or so rates were at historical lows .... then came the housing bubble, private equity bubble, commodity bubble, there were asset bubbles everywhere in mid 2000s that's what took that market rally to heights never seen before by 2008, that ended with a financial crisis, now we're back in the same game, more asset bubbles, Zero interest rates, QE 1 QE 2 QE 3 and soon to be QE 4, that's keeping this market fueled, but just like the last 2 market rallies we had over the last 25 years this one will end in a collapse as well, give it another 487 days, maybe 856 more days, hey maybe this goes another 1864 days but when it ends it's going to end just like the rest of them, with a collapse that will make history again.....
After 1,200 days, is a correction in the cards?
John Melloy | @johnmelloy
"I believe that the end of Fed QE (cannot be replaced by ECB QE in its influence) and growing possibility in my mind of a June rate hike, at the same time earnings growth is slowing, dramatically raises the risk of a stock market correction," said Peter Boockvar, strategist for The Lindsey Group, who quoted the figures in a Wednesday morning note to clients. "After six years into a bull market where valuations are very stretched, investors should be watching their back and not swinging for any fences anymore."
To be sure, going this long without a correction is not unprecedented. A report from RBC's Jonathan Golub last month pointed out that there have been two other longer stretches by the S&P 500 without a correction. They was a 2,553 day stretch from 1990 to 1997 and a 1,673-day run beginning in March 2003.
Golub points out that most bull markets end with a recession and not a Fed increase.
Perversely, Investors Intelligence sees its Wednesday report as a short-term bullish sign.
"It should be short-term positive. Overall some advisors lack a strong commitment to the bullish trend and even when they are optimistic they are not reluctant to change," II said.
But other notable Wall Street strategists believe the turbulence of January will be resolved with at least a 10 percent decline and maybe worse.
"We still see the pattern of 10-day new highs for Nasdaq versus the Composite Index as a significant negative divergence," wrote Alan Newman in his latest Crosscurrents missive. "Breadth and new highs/new lows have been in a persistent negatively diverging phase for many months and point to more than just an ordinary correction. Virtually all of our indicators point to a bear market underway."
The percentage of calls for a correction in the II weekly survey is at the upper end of its range for the last two months, according to II, so not an extreme by any means, but perhaps still reason for pause.
If one wants to trade along with the correction call, theProShares Short S&P 500 ETF is inversely correlated with the S&P 500. For more sophisticated investors, call options on the CBOE Volatility Index could be bought.
John MelloyInvesting Editor of CNBC.com
1990-1997 was the dot Com boom, which we all know what happened in 2000, the markets collapsed, in 2002 or so rates were at historical lows .... then came the housing bubble, private equity bubble, commodity bubble, there were asset bubbles everywhere in mid 2000s that's what took that market rally to heights never seen before by 2008, that ended with a financial crisis, now we're back in the same game, more asset bubbles, Zero interest rates, QE 1 QE 2 QE 3 and soon to be QE 4, that's keeping this market fueled, but just like the last 2 market rallies we had over the last 25 years this one will end in a collapse as well, give it another 487 days, maybe 856 more days, hey maybe this goes another 1864 days but when it ends it's going to end just like the rest of them, with a collapse that will make history again.....
After 1,200 days, is a correction in the cards?
John Melloy | @johnmelloy
"I believe that the end of Fed QE (cannot be replaced by ECB QE in its influence) and growing possibility in my mind of a June rate hike, at the same time earnings growth is slowing, dramatically raises the risk of a stock market correction," said Peter Boockvar, strategist for The Lindsey Group, who quoted the figures in a Wednesday morning note to clients. "After six years into a bull market where valuations are very stretched, investors should be watching their back and not swinging for any fences anymore."
To be sure, going this long without a correction is not unprecedented. A report from RBC's Jonathan Golub last month pointed out that there have been two other longer stretches by the S&P 500 without a correction. They was a 2,553 day stretch from 1990 to 1997 and a 1,673-day run beginning in March 2003.
Golub points out that most bull markets end with a recession and not a Fed increase.
Perversely, Investors Intelligence sees its Wednesday report as a short-term bullish sign.
"It should be short-term positive. Overall some advisors lack a strong commitment to the bullish trend and even when they are optimistic they are not reluctant to change," II said.
But other notable Wall Street strategists believe the turbulence of January will be resolved with at least a 10 percent decline and maybe worse.
"We still see the pattern of 10-day new highs for Nasdaq versus the Composite Index as a significant negative divergence," wrote Alan Newman in his latest Crosscurrents missive. "Breadth and new highs/new lows have been in a persistent negatively diverging phase for many months and point to more than just an ordinary correction. Virtually all of our indicators point to a bear market underway."
The percentage of calls for a correction in the II weekly survey is at the upper end of its range for the last two months, according to II, so not an extreme by any means, but perhaps still reason for pause.
If one wants to trade along with the correction call, theProShares Short S&P 500 ETF is inversely correlated with the S&P 500. For more sophisticated investors, call options on the CBOE Volatility Index could be bought.
John MelloyInvesting Editor of CNBC.com
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