Chart of the Day - Tuesday, August 22, 2023

Today’s Chart of the Day was shared by Nick Maggiulli (@dollaranddata). They say markets can correct in one of two ways: price or time. However, Nick points out that the S&P 500 has done both. The current drawdown reached a maximum of -25.4% at the October lows. It’s lasted 410 days, as we’re still down -8.5% from record highs. While the 2020 drawdown was deeper (-33.9%), the current drawdown has lasted 3x longer. Legendary Technician Alan Shaw once famously said, “The longer the base, the higher in space.” As tedious as this basing process feels, it could be laying the groundwork for a multi-year rally.