Just How “Stretched” Is The Market?

By Lawrence G. McMillan

There are many ways that analysts have been disseminating statistics that show the current market environment is at historic levels, not only in terms of price, but in terms of the length of time it’s gone without corrections of various magnitudes.  

We have occasionally mentioned these types of statistics in the past – particularly the length of time that the Standard & Poors 500 Index ($SPX) has remained above its 200-day moving average – but in this article, we’re going to expand the categories considerably. We’ll not only update the “200-day” information, but we’ll look at how long it’s been since the market made corrections of various sizes.  Moreover, we’ll compare the current data with historic data.

Putting The Data In Context

All of the data in this article encompasses studies on $SPX, dating back to the beginning of 1950. Unless otherwise noted, we are measuring market moves on a intraday basis, not just a closing price basis...

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