In 1973, "The Exorcist" ruled the box office while the economy was going to hell.
That year saw the start of a two-year recession marked by an oil crisis and stagflation, a noxious combination of high unemployment and high inflation that turned everybody's heads.
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And to make matters even worse, "Tie a Yellow Ribbon Round the Ole Oak Tree" was the top song for that year. Yikes!
Then, there was the tech bubble, which burst in 2000 following unprecedented growth in the information technology and telecommunications sectors.
Many internet startups went bankrupt, leading to massive job losses in the tech sector as the tech-heavy Nasdaq tumbled.
And 2008 wasn't a picnic either, as economic activity declined sharply, and U.S. gross domestic product fell by 4.3%, the deepest recession since World War II.
Stock markets worldwide fell sharply, many large banks and investment firms failed, including Lehman Brothers, and the economy took more than three years to recover.
Analyst compares previous market periods
Ryan Detrick has been tracking several volatile market periods and is a little concerned.
Detrick, chief market strategist at the Carson Group, has been checking the numbers from past economic downturns and the current market.
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"One big worry I have is the S&P 500 in Q1 violated its December closing low," he wrote on X, formerly Twitter, on Feb 10. "The returns for the full year are much worse when this happens vs doesn't happen. Years like ’73, ’74, tech bubble, ’08, and ’22 all made this infamous list. Now 2025."
The S&P 500 posted a December low of 5,867.08 and a first-quarter low of 5,827.04. And investors were rattled recently when consumer inflation ticked surprisingly higher in January.
One big worry I have is the S&P 500 in Q1 violated it's December closing low.
— Ryan Detrick, CMT (@RyanDetrick) February 10, 2025
The returns for the full yr are much worse when this happens vs doesn't happen.
Years like ’73, ’74, tech bubble, ’08, and ’22 all made this infamous list. Now 2025. pic.twitter.com/nEtUjpGapw
The veteran analyst followed up on his thoughts in a Feb. 13 post that cited the American Association of Individual Investors' Stock Sentiment Survey.
"Most bears in @AAIISentiment survey since early Nov '23, which marked the end of that 10% correction," Detrick wrote. "Bears up 13% in two weeks is also rare. Saw that at the end of the 10% Fall correction in '23, March '23 and the regional banking crisis, and late Sept '22 near the end to that bear market."
"In other words, when investors are this worried, a large fall from here would be quite rare," he added. "What makes this so interesting is other sentiment polls aren't this worried, in fact, option put/call ratios are flashing probably too much calm."
The stock market is entering the third year of a bull market, and there are skeptical analysts who will tell you that after two good years, stocks tend to be weak in the third.
Carson Group's 2025 Outlook, entitled "Animal Spirits,"--found that the third year after two years of big gains is actually pretty good.
The study said it's happened eight times since 1950, and only twice has the S&P 500 fallen back the third year: in 1977 and in 2000—the year the dot.com bubble went kablooey.
The third year of a stock market rally can be choppy and frustrating
"The S&P 500 has now gained more than 20% for two years in a row, something we have not seen since the 1990s," the outlook said.
"And while higher interest rates have made it more expensive to borrow, savers have enjoyed the benefit of better returns on savings and shorter-term investments than we’ve seen in decades."
Equities do have strong momentum going into 2025, the report said, "but it may not be smooth sailing while Congress and the new administration fully work out policy changes."
Related: Major fund manager reveals stock market forecast for 2025
Detrick said in a Feb. 11 blog post that the third year following two good years can be more choppy and frustrating.
"Although we expect stocks to do much better than the average third-year gain of 2.1%, this is still something to consider in 2025 as a potential issue," he said. "End of the day, after the huge gains we saw two years off of the October 2022 lows, it would be perfectly normal to see some consolidation at some point in 2025."
Detrick said that these various indicators don't necessarily mean that 2025 will be like those dark days of yesteryear.
"Still, this is one thing that undoubtedly is in my worry column," he said.
Detrick also discussed lagging advance/decline ratios, which are a cumulative tally of how many stocks go up or down each day on a specific exchange.
"When A/D lines make new highs, it suggests the indexes will likely continue a bullish phase," he said. "We saw A/D lines break down well ahead of the tech bubble bursting 25 years ago and again before the Great Financial Crisis, suggesting there indeed was deterioration under the surface."
While many stocks are doing well this year, Detrick said he is worried that various A/D lines have yet to breakout to new highs.
"There is still time here, but I’d classify this as a yellow flag for the bulls right now. Should these improve and eventually breakout (like I predict), then the bull would be back in a big way," he said.
Bob Lang has some concerns about the stock market and said so in his Feb. 10 TheStreet Pro column.
“A strong start to February may have lost its buzz, and that comes on the heels of a very hot month of January,” he wrote. “Volume is picking up as well, but with lower highs and lower lows the last two weeks we should recognize the bulls are losing their edge.”
Related: Veteran fund manager issues dire S&P 500 warning for 2025
