Dalton — The last week or so of stock market stumbling notwithstanding, we are now going on four and a half months of rallying. The median S&P 500 correction in the first six months of the recovery has been 8 percent. (For perspective, the S&P 500 averages 3.4 corrections of at least 5 percent and 1.1 corrections of at least 10 percent in a year.) Further moves downward is a high-probability event, from a historical standpoint. On closing basis, as of May 11, there had been 89 trading days since the last 3 percent correction (that stretch was broken Monday, May 13, as the corrected 4.2 percent from its most recent high). While far short of the record 308 days from November 2016 to January 2018, it was still the second longest streak since March 2009. Not only is that stretch long, it’s also atypical coming off a waterfall low like we saw in December. After such a decline, you typically see a strong rally, a quick but weaker retest, then the real rally starts.

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