The S&P 500 closed at yet another new all-time high on Friday (February 17, 2017), making it nine new highs so far in 2017. This is halfway to the 18 new highs seen in 2016, and nearly to the 10 made in 2015. The most ever took place in 1995, with an incredible 77 new highs. In fact, looking back to 1928, 5.1% of all days have closed at a new high.* No one knows how many more will take place this year, but what you do need to know is history has shown that new highs tend to happen in clusters lasting for potentially decades.
For 24 years from 1930 to 1953, the S&P 500 didn’t make a single new high, but it then made 371 new highs in the next 15 years. The ensuing 11 years saw only 34 S&P 500 new highs, with 31 of those taking place in 1972. Then from 1980 to 2000, it made 504 new highs, only to be followed up with just nine new highs in the following 12 years. This brings us to the past five calendar years, which have seen another impressive 135 new highs and show no signs of stopping.
Per Ryan Detrick, Senior Market Strategist, “New S&P 500 highs happen in clusters that last usually 15 to 20 years, only to be followed up by periods of at least a decade without many new highs. Well, after virtually no new highs for 12 years from 2001 to 2012, the current bull market since 2013 might feel old, but it is surprisingly relatively young. When compared with other bull markets since the Great Depression, the current bull could actually have plenty of legs left.”
For more on how long bull markets tend to last once they start making new highs again, be sure to read A Bigger Picture Look At The Bull Market.