Assuming there are people-people and there are numbers-people, only people-people are impressed by the fact that the S&P 500 finally broke thru the 2,000 barrier. To numbers-people, that number is no more important than 1,999 or 2,001.
But, this graph means something even to numbers-people:
The stock market has been trading within a relatively narrow range and shows no sign of breaking out, either to the upside or to the downside. I understand the logic of “this time is different,” but I also know the market averages one bear drop of 10% or more every 19 months, and we haven’t had one in 34 months. We are definitely over-due.
Bears claim this graph merely documents the influence of quantitative easing, and the market will drop when the Fed begins raising interest rates, probably the middle of next year. However, history tells us the stock market handles the first few interest rate increases just fine, although the bond market doesn’t.
The evidence remains overwhelmingly bullish to me that the bull run will continue . . . until it doesn’t.