The Stock Market is Correcting

August 12, 2014 7:59 PM

How old is this bull market? It depends who you ask.

We have now gone 548 trading sessions since the S&P 500 has a 10% (intra-day) correction . However, If you go the official scorecard, the numbers look quite different. It has been 757 sessions, or 1,104 days since we have had a correction on a closing basis.


The fact that it has been so long since we have had any sort of meaningful pull back has led to interesting investor behavior. Each dip is more shallow than the last while top callers grow louder with every 3% pull back, always proclaiming “this time feels different.”

One  can easily make the case that after eight months, with the S&P 500 flat YTD, we are correcting through time rather than price. After a 29% return last year, I can’t imagine a more bullish scenario for investors.

"It’s been 548 days since we’ve had a 10% correction"

"No, it’s been 757 days, we are so overdue!"

This is the epitome of splitting hairs and I can’t imagine a more useless argument. As if 10% is somehow a magic number. Why not 8%, why not 12%? This minutiae ought to be of absolutely no consequence. Investors should focus on their plan and let other people quibble over technicalities.

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