…Many important recent tops have often come in the month of March.
•August 1999 to March 2000 peak — followed by market/internet collapse into October 2002
•September 2001 to March 2002 peak — followed by a 35% decline into October 2002 (interesting that the SPX is trading EXACTLY at that March 2002 peak again)
•March 2003 to March 2004 peak — followed by a 9% decline into the August 2004 low (again, the SPX is trading EXACTLY at that March 2004 peak)
•August 2004 to March 2005 peak — followed by an 8% decline into April 2005 (low for the year)
•March 2009 to March 2010 peak?
Additional trading patterns to watch for (this is from our friend Mary Ann Bartels at Merrill).
•Four-year cycle low scheduled to bottom between July-October 2010
•Years ending in ‘0’ are the most negative of all decennial years (average 6.9% annual loss) with an intra-year correction of 22%
•Mid-term election years since 1930 average a 20% intra-year decline (peaks around March and bottoms around September)
•The prior four mid-term election years ending in ‘0’ (’30, ’50, ’70, ’90) averaged intra-year corrections of 26%
So far this year, the above trading patterns are aligning beautifully. Remember, history doesn’t repeat itself, but it often rhymes!