Yesterday the market signaled a rare and powerful signal
Over 60% of S&P 500 stocks set a new 20-day high in one day – and this has only happened 18 times since 1982!
What did this signal indicate in the past?
When such a high percentage of stocks in an index set a short-term high, it is a strong sign of market tailwinds.
This is not just another technical indicator – it is a pattern with a proven history of positive returns.
What do the previous 18 occurrences teach us?
Here are the full figures:
Average return after one month: 1.4%
Average return after 3 months: 5.1%
Average return after six months: 9.4%
Average return after one year: 18.6%
These are phenomenal historical figures
For comparison, the average annual return since 1950 is about 9%, which is double the historical annual average!
In addition:
In 100% of cases, the index was positive one year after the signal!
In over 83% of cases – positive return within 1, 3, and 6 months!
This is an optimistic indication that strengthens positive market sentiment.
When tailwinds come from so many stocks – it means the market isn't just climbing due to a few big names, but thanks to healthy and powerful market breadth!
If history indeed repeats – 2025 could be a good year for the stock market!