Bull Market Breakouts

The S&P 500 is currently 16 points away from taking out its prior bull market closing high of 1,363.61 made on April 29th of last year (284 days ago).  So what should investors expect if a breakout is made?  We analyzed all bull markets in the S&P 500’s history that have lasted at least two years (like the current one) and found all periods in which the index went six months or more without making a new bull market high.  We then calculated the performance of the S&P over the next week, month, three months, six months, and year from the day that the new high was eventually made.

Below are the thirteen periods during past bull markets where the S&P 500 went at least six months without making a new bull market high.  The ‘Prior High’ date is the day the initial high was made, while the ‘New High’ date is the day the new bull market high was made.  (If the index declined at least 20% from its “Prior High,” it signifies the start of a new bear market, so none of these instances are shown.  The current bull market is still a bull since we never closed down 20% or more on a closing basis from the high on 4/29/11.)

As shown, the market has done...

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