Source: SocGen
Source: SocGen

From Société Générale strategist Andrew Lapthorne comes the chart above, and the observation that “it has been 408 days since the last 10% correction in the MSCI World index, the 8th longest period on record.”

As the chart shows, this is just about the median length of time between corrections. The mere fact that we have not had a 10 percent or worse correction for a long time tells us very little about the state of the secular bull market, but it does make the odds of that 10 percent correction a little better as time goes on. Note this is an inevitable truth for any periodic event.

Laphorne does not suggest this chart “necessarily imply impending doom for equities.” In fact, he notes, “we find no relationship between time since correction and future returns.”

Regardless, we have now gone about as long as it typical between 10 percent corrections. As we noted this morning, sentiment is as bullish as it ever gets ("Investors Most Upbeat in 5 Years With Record 59 Percent Bullish in Poll").

A 10 percent correction over the next quarter or two seems like a pretty decent bet.