Will Low Volatility Mean Lower Risk Next Time?

Well, it's official. According to Ned Davis Research, this is now the longest period in history without the S&P 500 experiencing a correction of 3% or more. For those of you keeping score at home, NDR tells us that as of Monday's close, it has now been 262 market days since the last time the S&P pulled back by at least 3%. The current run breaks the previous record of 256 days set back in 1995.

To put this feat into perspective, consider that since 1928, the S&P has experienced a correction of at least 3% every 22 trading days (or about once a month) on average. It is for this reason that pullbacks of 3% or more are often referred to as "garden variety" affairs.

In case you were wondering (I was), this is also the 4th longest period in history without a 5% correction, the 10th longest stretch without a 10% correction, and the 2nd longest span since early-1928 without a 20% correction (aka a "bear market") for the S&P 500.

When these fun facts are added to the market's lofty valuation levels - many of which are either near or above historic highs - it is little wonder that so many financial advisors are nervous about the outlook for the stock market these days.

Sure, the economy appears to be picking up steam. Yes, earnings are strong. It is true that rates are low and inflation doesn't appear to be a threat. And no, the Fed isn't likely to go on the war path anytime soon. Thus, it is fairly easy to argue that the market's underlying fundamentals are pretty darn good.

Yet, investors and advisors alike remain nervous. The bottom line is nobody wants to get fooled again. No one ever wants ...

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Headline Risk Leads To Sloppiness, But So Far, So Good

Good morning. We've got a new week on tap so let's get started with a review of my key market models/indicators and see where we stand. To review, the primary goal of this exercise is to try ...

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Is That Weakness Creeping In?

Good morning. We've got a new week on tap so let's get started with a review of my key market models/indicators and see where we stand. To review, the primary goal of this exercise is to try ...

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Bulls Starting To Feel The Love

One of the primary arguments coming out of the bear camp these days is the stock market game is just too easy right now. Our furry friends suggest that when things become too one-sided for an extended length of time ...

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Bulls Showing Signs of Fatigue

Good morning. We've got a new week on tap so let's get started with a review of my key market models/indicators and see where we stand. To review, the primary goal of this exercise is to try ...

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The Daily Decision for 11.3.17 - DD LEADERS +21.5% YTD


The Daily Decision Models:

The Daily Decision is designed to be a simple, easy-to-follow e-letter service showcasing 3 different model portfolios. The LEADERS model is a growth oriented strategy that focuses on "where the action is" in terms of market ...

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Should We Still Count On a Year-End Rally?

It is said that history doesn't repeat, but that it often rhymes. And based on my experience, this is certainly true in the stock market. It is this very concept that is behind the study of seasonality on Wall ...

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What A "Blow-Off" Looks/Feels Like

The title of yesterday's missive was "The Blow-Off Stage?". The suggestion was given that the dominant color on my favorite models/indicator boards relating to the stock market's trend and momentum is green, it could be possible that ...

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The Blow-Off Stage?

I experienced some "technical difficulties" when attempting to get this report published yesterday morning. Between a new location for files, a new laptop, and the fact I was attempting to publish in the wee hours from a hotel room, well ...

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What Could Go Wrong?

Yesterday's missive took a glass-is-half-full stance by exploring the various tailwinds the bulls are counting on to keep stock prices movin' on up. The list included earnings, economic growth, low inflation, ongoing QE, favorable seasonality, the flows into passive ...

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It Can't Continue, Can It?

Yesterday, we talked about the fact that the stock market has now enjoyed the longest stretch ever without experiencing a correction of 3% or more. We noted that the CBOE Volatility Index (aka the VIX) recently hit an all-time low ...

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Fear Has Left The Building

Although the S&P 500 finished the session with the biggest decline in nearly two months, the fact that the venerable index didn't fall 3% yesterday meant a new record for the longest period of time without a 3% correction ...

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