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.