Thursday, July 18, 2013

new highs

Both the Dow and the S&P 500 made new historical highs today. The bull market which started in March of 2009 has been in progress for 52 months. The last bull market lasted 60 months from October 2002 to October 2007. What are the odds that the current bull market will match the duration of the last one? How high is this move likely to carry before a drop of 20% or more begins?

The chart above this post shows monthly bars for the cash S&P 500 for the past 20 years. On it I have illustrated some George Lindsay calculations which suggest that the current bull market will last less than the 60 months of the 2002-07 bull market.

For some time now I have been thinking that Lindsay's 15 year period from bear market lows to bull market tops would very probably time the top of the current bull market pretty closely. Counting this period from the October 1998 low projects a high for October 2013- January 2014 since the period's average length is about 15 years and 3 months.

There is reason to think that this period might expire a little earlier than its average duration this time around. I think one of Lindsay's basic advances started on October 4, 2011. These typically run about 2 years though they can go longer. So this basic advance is scheduled to end in October 2013.

The purple arrow on the chart points to the time of the likely bull market top this fall.

How much higher might this market go?. The last up swing which began from the November 2012 low and ended on May 22 carried the S&P up about 345 points in sixth months. A similar advance from the June 24, 2013 low would bring the S&P to about 1900 and would end in November 2013 if it matches the duration of the November 2012 - May 2913 advance.

A top near 1900 sometime this fall fits these time and price projections.

1 comment:

hooloo1957 said...

Carl the advance from nov went up about 325 points into may...