But as this chart from MarketGauge by DataView LLC indicates, there have been two incidences of this phenomenon since 1998. The closed-end funds traded at a premium for a good part of 2001, halfway through the bear market; and closed-end funds also traded at a premium for most of 2004.
The S&P 500 index went on to gain more than 250 points from the end of 2004 to the end of 2006. Based on the data available, I don’t think this is a sign of a top. On the contrary, the limited data available in this chart suggests that the opposite may be true. The closed-end funds were selling at the largest discount to net asset value right at the market top in 2000.