Market Tops & Bottoms:
- 1987:The Bull market began in August 1982 & Topped out 5 years later in Aug 1987
- 1987: Two months later, the market crashed in Oct 1987, 62 months (just over 5 yrs) after the bottom.
- 2014: The bull market began 5yrs ago in March 2009 & for now hit its high on Jan 15, 2014 (only 3 weeks ago).
- 2014: We are 59 months into this bull market.
- 1987: The S&P 500 was -16.3% below its August high on Fri, before the crash. Today SPX is only -5.4% below its high
- 1987: Crash occurred in Oct (almost 3 months after the Aug Top), Right now we are only three weeks from 2014’s high.
- 2014: For now, The Fed & Other Central Banks are still printing money, albeit at a slower rate
- 2014: For now, most moving averages are flattening out and some are turning lower. In 1987, the moving averages had turned lower and the major averages were trading on or below their 200 dma lines. Right now, only the DJIA is below its 200 dma line.
Until more (damaging) evidence occurs, the data suggests that Feb 2014 is not Oct 1987. Furthermore, it appears to be just another normal and healthy pullback within a broader uptrend. We do know that this bull market is aging as it celebrates its fifth anniversary in March. However, until the market begins to show definitive signs of weakness, it deserves the bullish benefit of the doubt.