$SPX has now had 3 corrections since the 2009 low. There is now a clear break higher. Maybe the market reverses, but that is clearly the lower probability scenario. Get on board and map out appropriate stops. pic.twitter.com/O79o8Teyls
— Jim Denholm, CMT (@denholm_jim) November 22, 2019
Today’s Chart of the Day was shared on Twitter by Jim Denholm (@denholm_jim). It’s a weekly candlestick chart of the S&P 500 since the financial crisis. Some folks argue that this bull market has lasted over a decade and that it’s now getting long in the tooth. The problem with that notion is that markets can correct in two ways; through price, meaning a sharp decline, or through time. Jim points out that since 2009, the S&P 500 has experienced three corrections through time, where price went sideways for over 20 months. Also, two of those corrections we’re just a few basis points shy of being considered a bear market. The drawdown in 2011 was 19.39%, and the drawdown at the end of last year was 19.78%. One could argue that we’re actually emerging from a cyclical bear market within a secular bull market.