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In a ‘normal’ market, the S&P 500 trading within 1.7% of its all-time high would be nothing to even think about, but when the market goes more than 100 trading days without a 1% decline and goes up seemingly every day, traders who have been spoiled tend to take notice of even minor moves.  Everything is relative, so a 1% move in one environment can take on a completely different meaning based on the backdrop.

Along with the S&P 500’s weakness over the last week, one trend that has emerged is that since the day after Trump’s address to Congress when the S&P 500 gapped up to another all-time high, the S&P 500 has seen five straight lower intraday highs.  That’s the first time that has happened since just before the election on 11/3.  That may sound a bit alarming given the bullish tape we have been in, but in the current bull market alone, we have seen similar streaks of the same length or longer 39 other times, including a streak of ten trading days in March 2011.  Following the fifth trading day of those 39 prior streaks, the S&P 500 averaged a gain of 0.76% over the following five trading days with positive returns 59% of the time.  That’s more than double the average of all five-day trading day periods (0.31%) during the current bull market.

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S&P 500 Since November

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