Stock Market Study: How Long After a 10%+ “Small Correction” to Make New Highs?
Stock-Markets / Stock Markets 2018 May 27, 2018 - 06:06 PM GMTBy: Troy_Bombardia
The S&P 500 made a 10%+ “small correction” from January- February 2018. In a previous study I looked at how long it usually takes for the stock market to go from its correction bottom to a new all time high.
In today’s study I’m going to look at how long it usually takes for the S&P 500 to go from an old all-time high to making a new all time high.
Here are the historical 10%+ “small corrections”, as defined by the Medium-Long Term Model.
- April 2, 2012
- July 16, 2007
- January 3, 2000
- July 19, 1999
- October 8, 1997
- April 14, 1997
- May 23, 1996
- January 3, 1990
- August 27, 1986
- September 25, 1967
- June 29, 1965
- September 23, 1955
Here’s how long it took for the S&P to go from a pre-correction high to a new post-correction high.
April 2, 2012
It took 98 days for the S&P 5 make a new all time high.
July 16, 2007
It took 58 days for the S&P to make new highs.
January 3, 2000
It took 54 days for the S&P to make new highs.
July 19, 1999
It took 85 days for the S&P to make new highs.
October 8, 1997
It took 40 days for the S&P to make new highs.
February 19, 1997
It took 52 days for the S&P to make new highs.
May 23, 1996
It took 78 days for the S&P to make new highs.
January 3, 1990
It took 102 days for the S&P to make new highs.
August 27, 1986
It took 68 days for the S&P to make new highs.
September 25, 1967
It took 147 days for the S&P to make new highs.
May 13, 1965
It took 92 days for the S&P to make new highs.
September 23, 1955
It took 35 days for the S&P to make new highs.
Conclusion
Here’s how long it took historical 10%+ “small” corrections to make a new high.
- 0 – 21 days (1 month):
- 22 – 42 days (2 months): 11
- 43 – 63 days (3 months): 1111
- 64 – 84 days (4 months): 11
- 85 -105 days (5 months): 111
- 106 – 126 days (6 months):
- More than 6 months: 1
As you can see, it usually took 2 – 5 months for the S&P 500 to make a new all time high. There was one exception that took 7 months.
This study suggests that the S&P 500 will probably make a new high by the end of June 2018 (5 months from January 2018). It should definitely make a new high by the end of August 2018 (7 months from January 2018).
Read Stocks on May 26, 2018: weekend outlook
By Troy Bombardia
I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.
Copyright 2018 © Troy Bombardia - All Rights Reserved
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