S&P 500 Streak – Trading days without a 1% daily decline – Currently 100 days
* The streak was finally broken on March 21st, 2017 with a -1.24% decline in the S&P 500 *
The last few months in the markets have been a little odd. Remember back before the election when all the pundits on TV were talking about how badly the markets would crash if Donald Trump was elected President? Even the night of the election, when results were coming in and it was becoming increasingly clear we were witnessing an epic upset in the making, the S&P 500 futures market was down an ugly 5%. Miraculously, by the time the markets opened the S&P 500 had fully recovered and actually finished the day green.
From there it’s pretty much been a straight shot upwards with the S&P 500 gaining over 13% since election night which seems to be quite a disconnect with reality. With all the uncertainty, all the negative press, and President Trump having the lowest approval rating of any incoming President since Eisenhower, markets continue to climb.
Is this bizarro world like that old Seinfeld episode (click here if you’re too young to know what that means) or are there fundamental reasons why the markets are so unstoppable?
As of today (March 7th, 2017) the S&P 500 has gone 100 days without a 1% daily drop. It’s the 4th longest such streak in the last 50 years and quickly closing in on the extended run we saw in the mid 90’s. Let’s see how long this will continue:
For aggressive traders it’s been a welcome surprise, but for conservative traders like myself these mixed volatility signals have kept trading fairly light of late.
The VTS Tactical Balanced Strategy has enjoyed the run and capitalized on all of it, but the VTS Tactical Volatility Strategy can’t take trades unless everything is aligned, which hasn’t been the case the past couple months. Things will change, they always do, but for now we’ll just take what the markets give us.
Any thoughts on what’s finally going to bring this run to an end? In all likelihood the Fed will be raising rates again next week so we’ll see if that can do it. Stay tuned.
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