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The market usually gives this 'advance warning' before plunging

Key Points
  • The S&P 500 posted an average of 67 trading days of high volatility, in which it rises or falls by 1 percent or more, before it tops out and drops at least 10 percent.
  • But the market is giving no signs of such turbulence, equity strategist Sam Stovall says.
  • Over the past 12 months, the S&P 500 has had just 11 days in which it rose or fell at least 1 percent.
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Trading the calmest market in history

Fear not. The market will likely give you a heads-up before a 10 percent pullback, equity strategist Sam Stovall says.

That heads-up typically comes in the form of rising volatility, CFRA Research's chief investment said in a note Monday.

Over the past 40 years, the posted an average of 67 trading days of high volatility, in which it rises or falls by 1 percent or more, before it tops out and drops at least 10 percent.

Stovall pointed out that the S&P 500 has had just 11 days in which it rose or fell at least 1 percent during the past 12 months.

"Investors have been both pleased and unnerved by the rising number of new highs that have been accompanied by an absence of volatility," Stovall said. "The market will likely continue to surprise investors in 2017 in a positive way, and may even be kind enough to warn of an impending correction through a ramp-up in daily volatility."

Pedestrians walk on Wall Street near the New York Stock Exchange (NYSE) in New York.
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Equities have risen to record highs this year, with the S&P 500 advancing nearly 15 percent.

The CBOE volatility index has traded around historically low levels and has had five-straight weeks in which it closed below 10. The VIX measures the market's anticipated volatility over a 30-day period using a range of S&P 500 options.

Further signs of the quiet action in stocks were highlighted by analysts at LPL Financial. In a note Monday, they said the S&P 500 has gone 242 trading days without a 3 percent correction, the longest such streak in the index's history.

"I do think we are in the latter stages of this bull market," Todd Gordon, founder of TradingAnalysis.com, told CNBC on Monday. "We're at a 4.5 percent monthly high-to-low range. That's the quietest in history. We have never seen a tighter market and that just spells complacency. That makes me worried."