Post-Record Performances The S&P 500 is on the verge of a new closing high. Then what? From Standard&Poor's Equity Research. According to Standard&Poor's Chief Technical Strategist Mark Arbeter, the technical picture for the S&P 500 indicates the benchmark will probably eclipse its record closing high of 1527.46, set on March 24, 2000, sometime in May or June of this year. If Arbeter is right (and he usually is) what will that mean for future market action once the adrenaline rush has subsided? If history can serve as a guide (but remember past performance is no guarantee of future results), we will likely see sub-par price performance in the first month following the setting of a new high, and then find above-average price appreciation in the three and six months after. In addition, the next market top usually occurred around three years after the setting of a record high. S&P defines bull and bear markets as 20% advances/declines off of a prior bear/bull market's lows/highs. We are currently in the 11th bull market since the early 1940s; it began in October, 2002. Since 1942, bull markets have averaged 4.5 years. Even though the current bull market is one month past this average bull-market duration, S&P believes this bull is not likely to buck anytime soon. A spate of profit taking might make us feel a little better about the future, however. The old adage - buy on rumor, sell on fact - has caused many investors to wonder if the S&P 500 will slump once establishing an all-time high. Without doubt, many will finally say: "It's about time," and for good reason. Since 1942, it took the S&P 500 an average of 23 months to set an all time high during a new bull market. Should the S&P 500 set a record in May, this bull will have gone 57 months before establishing a new record. Only the bull market of October, 1974, to July, 1980, which followed a 48% decline in the S&P 500 during the bear market of 1973 to 1974, took longer (70 months). It was nearly three years before the S&P 500 was able to retrace its steps in the bull market of 1942 to 1946. That too followed a terrific bear market (the S&P 500 lost more than 45%). And once a new record was set, it was not straight downhill from there. Not surprisingly, the S&P 500 took a breather in the first month following the setting of a new high, declining an average 0.7%, yet posted above-average returns of 2.6% and 5.2% in the three and six months after the record high was established. More encouraging, however, was the next market top typically occurred more than three years later.