Food For Thought

Thursday, October 19, 2017

This is a yearly chart of the SP500 from 1962 to 2017. Is it just me or do those two periods look similar?

-From 1963 through 1980 the market remained in a sideways trading range (17 years)

-From 1999 through 2013 the market remained in a sideways trading range (14 years)

Trading volumes are notable as well; Heavy distribution volume came in through 2000-2002. The level of supply that was created went on to contain price for the next decade.

It wasn't until the last few years that we began seeing some accumulation volume come into the market. Following 2006, volume declined every year until 2012.

Trading volumes are now increasing as prices rally away from the base.

The previous instance when prices cleared decade long range highs, the market rallied for the next 18 years with less than a handful of negative years during that period.

The current market is in year 5 of the most recent breakout.

Is it possible we remain early in this emerging trend? Does it look like America is failing?

Yes. No.