Update: A 10 Year Look At The SP 500 With Corrections SPX

Over the past few months, the stock market has seen a few swings. This shouldn’t come as a big surprise. Back in August of 2014, I wrote a research note on the S&P 500 and the lack of a “technical correction.” In stock market lingo, a correction from current highs is generally considered to be -10%, while a pullback is generally less. At that time, the past 4 pullbacks averaged just over 4 percent.

Now that six months have passed, let’s check in to see if we got that S&P 500 correction and where the stock market is likely headed.

In September-October of 2014, we did indeed get a pullback of -9.83% (perhaps close enough). December of 2014 saw a pullback of -5.14%. And the only pullback so far in 2015 was -5.38%.

And for even more context, consider this: the average of the past seven pullbacks is -4.72%.

Those type of pullbacks will likely continue. However, given the Federal Reserves reluctance to raise interest rates, it’s my opinion the stock market still has more upside in 2015. And that could put off another S&P 500 correction for a little while.

S&P 500 Index – 10 year weekly chart

S&P 500 10 year chart.

S&P 500 10 year chart.

 

Thanks for reading,
Dave

 

 

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