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When Will We Finally See a Pullback?

Todd Bunton

The recent stock market rally has been truly remarkable. Since November 15, the S&P 500 has surged +23% and is up about +17% year-to-date.

In fact, the year-to-date return for the market through May 20 is the best start to the year since at least 1990 (yes, even outpacing anything seen in the late 1990's):

(Note that in each of the other 4 years the S&P finished much higher by the end of the year.)

Perhaps even more remarkable is that the rally has been virtually uninterrupted in 2013. Since January 1, the index has finished in the green 16 weeks compared to just 4 in the red. And the worst "pullback" we've seen so far this year was the April 11-18 stretch when the market slid -3.8% peak-to-trough. And the index quickly regained those losses by the end of the month.

It's worth noting, however, that the last 3 years had strong starts too, only to see meaningful slowdowns by mid-year:

So when do you think we will finally see a pullback in the market?

Let's define a pullback as at least a 5% decline from the market's highs (which would currently be around the 1590 level on the S&P 500).

We will see a pullback...

A. Soon. Within a few weeks.
B. Over the summer... and for the 4th time in a row.
C. Not till the fall/winter. Momentum is too strong right now.
D. In 2014 (or later!)

Chime in below. And please give some reasoning behind your answer.

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