Investors have been enjoying a bull market from as far back as October 2002, says CNBC’s Erin Burnett today on “Street Signs.” So is a correction imminent? Mark Arbeter of Standard & Poor’s says yes – and it’s best we get it out of the way now. If the market doesn’t let off some steam, it could suffer a 1987-type crash.
Arbeter, the chief technical strategist at S&P, uses an indicator that tracks the trading volume of the Nasdaq and New York Stock Exchange to predict market corrections. Any time the Nasdaq volume is 40% higher than the NYSE over a three-week time period, there’s a dip in the numbers. According to Arbeter, it has happened once in 2004, 2005 and 2006, and the S&P 500 corrected about 7%-8% and the Nasdaq about 13%-17%.