We are dealing with the current market with a mob mentality. This theory is supported by the correlation index that Birinyi Associates has developed. The index shows a 50-day moving average correlation between the direction of the S&P 500 and its member stocks. A 50% correlation means that half the stocks are moving along with the index while the other half are moving against it. A correlation index of 100% means stocks are exactly tracking the index. Average correlation since 1980 has been 44%. This leaves room for mutual funds to outperform the market. By mid-June of this year the correlation was about 70% and recently surpassed 2008’s high of 75% by hitting just over 80%. Incidentally, since the 1987 crash, it has only hit 83% for one day.