It wouldn’t be too surprising given the other conditions usually seen at market tops; high valuation levels, high level of bullish investor sentiment and participation, heavy insider selling, and so on.
It has also been more than three years since the market experienced even a normal 10% to 15% correction, while on average it does so every 12 months. And of the 25 bull markets of the last 100 years, this is the fourth longest running since 1929.
You do have to at least ask yourself if that is justified, especially given the still anemic economic recovery. The market is higher than in 2000 and 2007. Even in those years of booming economic conditions, the market was not able to drive even higher, the S&P 500 instead losing 50% of its value in those apparently forgotten bear markets.
I know, it’s all about the Fed’s easy money policies and near-zero interest rates. But still, at those market tops, and indeed all market tops, there were also reasonable explanations of why ‘this time is different’.
This article is brought to you courtesy of Sy Harding From The Street Smart Report.