Blog of HORAN Capital Advisors | Nov 24, 2013 12:20AM ET
One interesting aspect of this bull market run for the S&P 500 Index has been the absence of a 10+% correction.
It seems on a daily basis the talking pundits on business news channels and in print are certain an equity market correction is just around the corner. For those investors under-invested in equities, a correction would certainly be a welcome event. Market corrections, however, are hard (if not impossible) to predict and when they do occur, they tend to surprise investors. As the below chart of market advances without a 10% correction shows, it is not uncommon for the market to move higher without significant pullbacks.
As noted in the Bramesh article,
The other factor that seems to be preventing a so called market "melt up" is investor sentiment has not become overly bullish. In the sentiment survey release by the American Association of Individual Investors earlier this week, bullish sentiment actually feel 4.8 points after falling 4.3 points in the prior week. Investors should keep in mind though, sentiment indicators are most predictive at their extremes.
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