A Year Without a New High, What Does It Mean?

One year ago tomorrow the S&P 500 closed at 2130.82, which was also the last time it closed at a new all-time high. Going back to 1955, this is now the 13th time the S&P 500 has gone a full calendar year without a new all-time high. It is worth noting that on a total return basis (including dividends), the S&P 500 did make a new high last month. On a price-only basis the S&P 500 hasn’t reached a new high, which is what we are focusing on here.

Taking a closer look at the data, the longest streak without a new high was during the 1970s and early 1980s at nearly 1,900 trading days. (One calendar year is approximately 252 trading days.) Since 2000 there have been two vicious bear markets, and both times saw streaks of more than 1,000 trading days without new highs. The flip side is 1994–1995 went 259 days (so just over one calendar year) without a new high and 1983–1984 saw a period of slightly more than a year without a new high. Be aware that both of those year-long consolidations took place in the midst of longer-term bull markets.

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So although it has been a long time since the last new high, it is possible that a year consolidation without a new high can happen before a resumption of the bull market. We will have much more on this important development in next week’s Weekly Market Commentary.  

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