Putting Major Markets into Perspective – A Look Back from 1999 to 2009

Dec 2, 2009: 11:30 AM CST

With 2009 coming soon to a close, I thought it would be a good idea to put major markets into perspective by looking back to 1999 to 2009 on the monthly charts of the S&P 500, NASDAQ, US Dollar Index, Gold, and Crude Oil.

First, the S&P 500:

The S&P 500 peaked at 1,550 in early 2000 and late 2007 – both signaling market tops that price was unable to breach.

The current price of 1,100 is 30% lower than the 2000 and 2007 peaks after a stellar rally from the March lows.  As great as the rally has been, we’re still in the midpoint from peak to decline (actually we’re almost exactly 50% from the high to the 2009 lows).

I can’t help but note a similarity to the rise from early 2003 into early 2004 which resembles the current rise, though the current rally has covered more price and percentage change than the 2003 ‘full year’ rally (2009 looks like a ‘full year’ rally with the exception of January and February).

Still, at 1,100, we’re beneath the 1,300 level that price was trading at the start of 1999 – that’s 15% under where price began 1999.

Next, the NASDAQ:

People often forget how devastating the NASDAQ “crash” was in 2000 and 2001, and that it will take many more years if not a decade or more to reach the 5,000 index peak seen as 2000 began.

With price currently at 2,250, that’s still 55% beneath the 5,000 price peak and we’re still under the 2,500 level the NASDAQ traded when January 1999 began (10% beneath).

We’re about 25% down from the 2007 peak near 2,800.

Crude Oil:

Next to Gold, Crude Oil was the ‘darling’ of the 2000s… with the exception of the 2008 price collapse from $147 to $35 per barrel.

Price began 1999 near $12 per barrel and then peaked in mid-2008 at $147 a barrel – an amazing and stratospheric 1,100% rise from low to peak.

Price still remains well above the 1999 level, trading currently at $80% (550% higher than 1999’s start) but still roughly 50% beneath the 2008 price peak.

Gold:

Gold will likely be the ‘story market’ of the decade of the 2000s.  Price began 2000 at $300 per ounce and is currently trading 400% higher at $1,200 per ounce.  As of this writing, there is no end in sight, with prominent market analysts calling for $1,500, $2,000 or even higher price targets.

Gold, unlike Crude Oil, has more than recovered its $1,000 price peak in mid-2008 when Crude Oil peaked at $147 per barrel.  In fact, gold is roughly 20% higher than its 2008 price peak (keep in mind the S&P 500 is still down 50% from its 2007 peak).

The US Dollar Index:

The market that has suffered most is that of the US Dollar (Index).  The Dollar Index began 1999 at the $95 Index level, rose prominently until its mid-2001 peak above $120… and fell all through the decade with the exception of 2005 and late 2008.  Price remains in a primary downtrend.

While the chart may look terrifying, in percentage terms, the Index is ‘only’ down 25% from where it began 1999 at $95, and is down 40% from its 2001 peak near $120.

Use this post and these charts as a reference for the 1999 – 2009 period when looking at how major markets have performed over the last decade.

Also, to keep up with Inter-market trends, opportunities, and current analysis, consider becoming a subscriber to our Weekly Inter-market Reports.

Always remember to look at primary trends and keep perspective on the markets or stocks you are trading.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

11 Comments

11 Responses to “Putting Major Markets into Perspective – A Look Back from 1999 to 2009”

  1. terlyn Says:

    This is great, Corey. I don't think gold is that uncorrelated to the market indices, except that it seems to be like a leveraged index fund. When the market goes down, even intraday, gold usually follows. I think if the market sinks, gold will also sink.

  2. Chart Junkie: Putting the US Dollar in Perspective | Wall St. Cheat Sheet Says:

    […] Corey Rosenbloom, CMT, submits: “The market that has suffered most is that of the US Dollar (Index).  The Dollar Index began 1999 at the $95 Index level, rose prominently until its mid-2001 peak above $120… and fell all through the decade with the exception of 2005 and late 2008.  Price remains in a primary downtrend. […]

  3. Tim - TraderInterviews.com Says:

    Great analysis, Corey. I'm so focused on the intra-day stuff sometimes that I forget to step back and get a bigger picture. Thanks for the reminder to do so!

  4. Corey Rosenbloom, CMT Says:

    Thanks Tim!

    Me too. At my evening research session the other night, we spent a great deal of time looking at monthly charts and it hit me how much I don't take the time to look at those and how important they are.

    It just takes a moment but it's so easy for us who focus on 5-min and 1-min charts to forget to do so!

  5. Corey Rosenbloom, CMT Says:

    It's amazing when I took the time to compare these charts – we think gold, oil, and the S&P 500 move in lock-step – and to an extent, they do currently, but that's not been the case for the whole of this decade.

    Gold has been the big winner, with oil second, and the S&P & NASDAQ are under their 1999 and 2000 marks.

    But you're right – if the market finds a peak soon, odds favor gold and oil to pullback in sympathy due to recent correlations.

  6. terlyn Says:

    Hi Corey,

    I just wanted to mention that I heard your interview with the guy who interviews traders (I forgot his name), and I was so impressed! I learned a lot. You are an inspiring person!

    Thanks again for your help.

    Terry

  7. Tim - TraderInterviews.com Says:

    Great analysis, Corey. I'm so focused on the intra-day stuff sometimes that I forget to step back and get a bigger picture. Thanks for the reminder to do so!

  8. Corey Rosenbloom, CMT Says:

    Thanks Tim!

    Me too. At my evening research session the other night, we spent a great deal of time looking at monthly charts and it hit me how much I don't take the time to look at those and how important they are.

    It just takes a moment but it's so easy for us who focus on 5-min and 1-min charts to forget to do so!

  9. Corey Rosenbloom, CMT Says:

    It's amazing when I took the time to compare these charts – we think gold, oil, and the S&P 500 move in lock-step – and to an extent, they do currently, but that's not been the case for the whole of this decade.

    Gold has been the big winner, with oil second, and the S&P & NASDAQ are under their 1999 and 2000 marks.

    But you're right – if the market finds a peak soon, odds favor gold and oil to pullback in sympathy due to recent correlations.

  10. terlyn Says:

    Hi Corey,

    I just wanted to mention that I heard your interview with the guy who interviews traders (I forgot his name), and I was so impressed! I learned a lot. You are an inspiring person!

    Thanks again for your help.

    Terry

  11. Hewison Updates us with Videos of the Dollar, Gold, and Crude Dec 17 | Penny Stock Trading System Blog Says:

    […] Putting Major Markets into Perspective:  A Look Back from 1999 to 2009 […]