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How have markets done in the 5th year of a bull run?

The chart above comes from Jeffrey Kleintop, LPL Financial’s chief market strategist. The bull market that began in March 2009 is the seventh to last at least four years since World War II. Of those seven, only four ran for five years or more, with an average gain of 22%. The four-year gains ranged from 58% in October 1990, to 138% in August 1982.

Before getting too excited, note that this is an exceedingly small sample set, one that is barely better than even money (57%).

One other noteworthy factoid: David Wilson of Bloomberg notes that two and one half months into the new year, “the S&P 500 has yet to retreat for more than two days in a row this year.”

That is a helluva streak just begging to be broken . . .


Chart of the Day
David Wilson
Bloomberg March 13

Category: Markets, Technical Analysis

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4 Responses to “Fifth-Year Rally Precedents”

  1. Old Rob says:

    Some possible cratering events:
    1. A re-run of the real estate market problem. Too many people chasing the rental market real estate at the same time without genuine renters forming new households. Recent post of RE market improvement might be illusion (or worse, delusion).

    2. Low wage appreciation (via solid GDP improvement). Non-financial, non-government, non-union workers, (i.e lower wage workers who pay the tab in this country by the numbers) do not have the earning power to sustain economic ‘improvement’. Sad situation; we need more taxpayers, not tax takers.

    3. Stock market performance possibly not based on real earnings. Is the market to tank in the last half of this year when the true earnings run out gas?

  2. [...] Here is an interesting chart from David Wilson of Bloomberg, via Barry Ritholz’s The Big Picture blog. [...]

  3. Angryman1 says:

    Meh on the so called “low wages”. That looks over as well.

    I am seeing little problems in RE outside the typical issues. Typical recovery always strains the rental markets. That was true in the 90′s recovery as well.

  4. DeDude says:

    “notes that two and one half months into the new year, “the S&P 500 has yet to retreat for more than two days in a row this year”

    You had to jinx it – didn’t you.