• What Does October 2013 Have In Common With October 1987?

    by  • October 16, 2013 10:44 am • Quick Hits

    Now that I have your attention, the good news is I don’t see much of a chance of an ’87 like crash.

    The answer to that question is just yesterday the SPX closed above it’s 200-day moving average for 228 straight days, topping the 227 streak it had right ahead of the ’87 crash.  I tweeted this stat out last night and it had 30 retweets.  In other words, this was very popular, so I wanted to touch more on it.

    Here are all the longest streaks above the 200-day MA going back 40 years.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    I don’t take this as bearish.  To me, these streaks can go much further, as you can see above.  The fact we continue to see total freak outs on just 5% pullbacks is very bullish.  If/when we drop 5% again and we don’t see panic, then I’d be worried.

    I’ve been in the bullish camp most of this year and clear back in August I went on CNBC saying we wouldn’t see any ’87 like crashes.  Back then (just as it was last week) many have been vocally expecting a big crash this October.  I still don’t see it.  Check out my overall market thoughts in the recent Monday Morning Outlook for more on this.

    About

    Ryan Detrick is the Senior Technical Strategist at Schaeffer's Investment Research in Cincinnati, Ohio. He joined Schaeffer’s in 2003 and is a frequent speaker and writer on stock market and economic issues and is widely sought after by financial media for his expertise and commentary. Mr. Detrick is a common guest on CNBC, Fox Business, and Bloomberg Television and has been quoted in outlets such as The Wall Street Journal, BusinessWeek, USA Today, Reuters, the Associated Press, and others. With a decade of financial industry experience in the investment and financial services area, strengths include short-term trading with an eye toward timely technical- and sentiment-based trading opportunities, and advanced option trading strategies. Mr. Detrick received a BA in finance from Xavier University, an MBA in finance from Miami University, and has earned his Chartered Market Technician (CMT).

    http://schaefferstradingfloor.com/