Sometimes markets can form similar patterns to prior bull or bear movements. What’s happening to the S&P 500 (SPX) since July 2024 could be matching the action in 2007.
The daily SPX chart courtesy of Trading View compares what’s happening in 2024 to 2007.
On 07/16/07 the SPX made an intermediate top then declined into an August bottom. The subsequent rally then pushed the SPX moderately above the July peak. The high in October 2007 top was the ultimate top of a five-year bull market.
On 07/16/24 the SPX made a top then declined into an August bottom. The subsequent rally has moved moderately above the July 2024 peak. However, the post August 2024 rally may not be complete. Please note that on 10/04/24 the SPX ended the session only .30% below the all-time high made on 09/26/24. If the SPX can make a new all-time high in the next few trading days an ultimate top could be made. The SPX top in 2007 was made on 10/11/07. Its possible an important 2024 peak could be made within a few trading days of the seventeen – year anniversary of the October 2007 top.
The next daily SPX chart shows what happened after the 10/11/07 top.
Four months after the 10/11/07 top the SPX declined close to 20%.
Since the October 2022 bottom the largest SPX decline was from July 2023 to October 2023 -10.7%
It’s a good guess the complacent stock bulls of today are not expecting a four-month 20% SPX decline.
The SPX action from October 2007 to January 2008 could be a template for what may happen in the coming months.
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