Mark August 10th on your calendar. That is the day when the current streak of trading days without a new bull market closing high will move into third place overall going back to March 2009. The chart below shows the longest streaks that the S&P 500 has gone without closing at a new bull market high. While the current drought is just about six months long, there have been four streaks since March 2009 that were longer. The longest of these streaks lasted more than a year when the S&P 500 went 285 trading days ending in early July 2016 without a new high. The reason that streak lasted so long was largely due to China’s yuan devaluation in August 2015, and it ended surprisingly enough when US equities actually surged in the days that followed the surprise Brexit vote.
After the 2015/2016 streak, the only other streak of 200+ trading days without a new closing high ended in February 2012. The catalyst for that dry spell of new highs was when the US was stripped of its AAA rating in early August 2011 amid the debt ceiling debate. Then, in the fall of 2011, FOMC chair Ben Bernanke announced “Operation Twist” which helped to get financial markets back on a firmer footing.
With the S&P 500 down just 2.56% from its prior bull market high in January, all the bulls need is a few good days strung together in order for this streak to end. Then again, it is the middle of earnings season, so a run of a few bad days would easily extend this streak to third place overall.
On the subject of earnings season, our most recent Bespoke Report newsletter provided a detailed look at this quarter’s trends so far and what to expect for the remainder of the reporting period. To check out the report and also gain access to tools like our interactive Earnings Calendar, start a two-week free trial to Bespoke Premium.