After dropping nearly 20% late last year, the S&P 500 Index has officially bounced up more than 20% from the December 24 lows. As we noted at the time, most bear markets that take place in a non-recessionary environment tend to bottom near a 20% correction. Fortunately, that played out nicely, and now the S&P 500 is less than 4% away from new highs. This raises two new questions: Can it make a new high, and when can we expect it?

First things first. We do anticipate new highs in stocks later this year. With the Federal Reserve (Fed) on pause, fiscal policy still flowing, a deal with China on trade likely sometime in the coming months, modest valuations, and a much lower bar to beat after massive earnings estimate cuts earlier this year—we think this bull market is alive and well.

“Here’s the catch. The S&P 500 hasn’t made a new high since September 2018, but history tells us it does take about a year to recover after a bear market,” explained LPL Senior Market Strategist Ryan Detrick. “But the good news is, it took only about six months to recover when the economy wasn’t in a recession, making any new highs over the coming months perfectly normal.”

As our LPL Chart of the Day shows, looking at all the bear markets going back 60 years, it has taken about a year on average to recover the previous peak after a bear market. Yet, it has taken a year-and-a-half to recover if the economy was in a recession versus only six months if the economy wasn’t in a recession. Given we don’t see a recession on the horizon, this increases the odds of eventual new highs likely occurring sooner rather than later.