100 Days Above the 50-Day: A Warning Sign?

The S&P 500 has been above its 50-day moving average for 111 trading days, the longest streak since 2006.  Some technicians have point to this fact as cause for concern and suggest the market is "due" for a correction.  The historical data does not come to the same conculsion.

 

There have been eight other instances, since 1962, that the S&P 500 has remained above its 50-day moving average for at least 100 trading days.  On average the S&P remains above its 50-day for another 37 trading days and gains, on average, another 2.6% in the next six months.

 

When the index did eventually trade back below the 50-day in only one instance did the market fall more than 3% in the next month.

 
The most notable bullish example was 1995, when the market remained above its 50-day average for another 157 trading days and gained 13.6% in the next months.

 
 

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