Replay of 10 Years Ago?

I normally don’t pay attention to these kinds of historical parallels, but there’s a strong similarity between today’s market and the market of 10 years ago. Both markets are stuck in trading ranges and both have very low volatilities.

Here’s the S&P 500 from November 1992 to February 1995:

And here’s the S&P 500 since December 2003:

I keep thinking that the market will break out of its trading range, but it never seems to. Each time we get close to a new high, the market backs off. What turned the market around in 1995 was a rally in the bond market. I don’t think we’ll get that again, but stranger things have happened.

Posted by Eddy Elfenbein on September 13th, 2005 at 3:48 pm

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