A 10% correction is well within the limits of a healthy bull market.For the Dow that could mean a three-quarters give-back of the Trump rally and a return to Dow 18,700. (Please see chart, below.) On the charts, that would return the Dow to test its breakout from a two-year range and barely break the 200-day moving average.And that means the wind is at the bulls’ backs for the next few years.Of course, that does not mean there won’t be sell-offs or even major corrections.Here is a short list of the market bottoms, actually starting before 1973: • 1966 – The great credit crunch • 1973-74 – Arab oil embargo • 1980-81 – Fed spikes interest rates to squash inflation, Hunt brothers silver collapse • 1987 – October crash • 1994 – Bonds suffer a bear market and interest-rates spike • 2001 – Internet bubble collapse • 2008 – Real estate bubble collapse • 2015 – Flash crash • 2022 – ?It is possible to follow the cycle even farther back in time, but it starts to degrade.In the financial markets, it is no secret that rallies give way to corrections, and declines give way to recoveries, often on measurable timetables. suffers a financial calamity (his words) of some kind every seven years.
While the Netherlands failed to elect the anti-European Union candidate, France will head to the polls soon with a similar candidate. Fears are that the EU itself is under extreme pressure to even stay together.Indeed, the Dow was fresh off a record-setting pace of consecutive all-time high closes before blowing its last remaining fuel March 1.