Sam Stovall on History of Bull Markets That Hit Their Fourth Birthday

By on March 15, 2013

Sam Stovall - S&P Capital IQS&P Capital IQ’s Sam Stovall spoke with Fox Business correspondent Dennis Kneale about the frustrations shared by both bulls and bears as the stock market makes its relentless climb higher. Stovall said it usually takes several attempts to break through the old high (on the S&P 500).

Kneale pointed out that the Volatility Index (VIX) had hit a low for this cycle to which Stovall responded that with the VIX this low it was only a matter of time before the market experienced a decline of 5% or more.

Kneale mentioned the positive economic underpinnings with the Dow over 14,000 as compared to the last time it was near this level (in 2007).

1) GDP is 12% higher

2) U. S. exports are up 40%

3) Cash in the bank is up 30-40%

4) Inflation is still low

Stovall said looking at these factors, the only thing out of line is the market averages in relation to their 200-day and 50-day moving averages. Nothing else indicates we’re near a market top, he added.

Stovall stated that five of six bull markets since World War II that reached their fourth birthday went on to celebrate their fifth birthday with a traditional gain of 21 percent led by the cyclical sectors.

Back in October, Stovall forecasted the S&P 500 would approach 1600 [link].

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