From Société Générale strategist Andrew Lapthorne comes the chart above, and the observation that “it has been 408 days since the last 10% correction in the MSCI World index, the 8th longest period on record.”

As the chart shows, this is just about the median length of time between corrections. The mere fact that we have not had a 10 percent or worse correction for a long time tells us very little about the state of the secular bull market, but it does make the odds of that 10 percent correction a little better as time goes on. Note this is an inevitable truth for any periodic event.

Laphorne does not suggest this chart “necessarily imply impending doom for equities.” In fact, he notes, “we find no relationship between time since correction and future returns.”

David Fuller's view

FT Money has seen no “impending doom for equities” since the 2008 crash wiped out speculative valuations for the second time this century, commencing with the burst tech bubble in 2000.  Those two large bear markets were reminiscent of the 1970s, when the previous valuation contraction cycle was underway.  I maintain that 2000 and 2008 roughly equate to 1968 and 1974, albeit within different fundamental backgrounds, other than that the previous secular bull markets had ended.

 Is there a further comparison with that previously lengthy plateau which commenced in the mid-1960s, in terms of where we are today?

Possibly and my guess is that today’s equivalent is with the 1980 region, still going up but somewhat overstretched and overvalued relative to most other markets.  Meanwhile, the article above mentions that it has been 408 days since the MSCI World Index saw a 10% correction.  More importantly, I believe it is now 594 days since the S&P500 had a reaction of that magnitude.  It remains very steady and the leading Nasdaq Indices, NDX and CCMP closed at new recovery highs today.