The S&P 500’s breakout to new highs in late October has kicked off a resumption in the count of record closing highs with half a dozen in just the last twelve trading days.  With four record closing highs during the April failed breakout and then another nine in June and July, the total for 2019 now stands at 19, which is tied with 2018.  A year ago today, the S&P 500 was close to 8% below its record high, so therefore the prospect for additional highs to close out the year was low, but this year is another story altogether.  As of this writing, the S&P 500 is actually above its record closing high of 3,093.08, so not only are additional new highs likely over the next seven weeks, but we may even see one today.

The chart below shows the number of new highs for the S&P 500 by year going back to 1950.  Over the 70 years shown, the greatest number of record closing highs for a given year was in 1995 when there were 77, while 1964 saw the second most with 65.  In the current bull market, 2017 had the most record closing highs at 62.  2017 was also a year where the S&P 500 never saw a pullback of 3% or more, so therefore record highs were always within striking distance.

One interesting aspect of the chart is that there have basically been three distinct periods since 1950 where new highs for the S&P 500 were clustered together. The first was from 1954 through 1968 (there were also two years in 1972 and 1973 but there were four years between without any) and the second spanned a 21-year window from 1980 through 2000.  The latest period began seven years ago in 2013, and while it may seem like the current 10-year market run has become long in the tooth, if it’s anything like the prior two periods, it could be another few years at least before occurrences of record new highs start to dry up.  Sign up for Bespoke’s “2020” special and get our upcoming Bespoke Report 2020 Market Outlook and Investor Toolkit.

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