S&P 500: 60% of Stocks Above 20-Day Highs Could Hint at Double-Digit Returns Ahead
Investing.com | Dec 18, 2023 06:15AM ET
- Recently, Dow Jones achieved its 11th consecutive year of new all-time highs, surpassing the 1989-2000 record.
- Meanwhile, over 60% of stocks listed in the S&P 500 reached new 20-day highs - a rare event with historically positive implications.
- Moreover, bullish sentiment has reached 51.3%, the highest since July 20, 2023, while bearish sentiment has dropped to 19.3%, the lowest since January 3, 2018.
- Year 2017: 71
- Year 1995: 69
- Year 1925: 65
- Year 1964: 62
- Year 1928: 58
- Nasdaq +41.54%.
- Nikkei Japanese +26.35%.
- S&P 500 +22.91%.
- Ibex 35 Spanish +22.68%
- Dax +20.31%
- Euro Stoxx 50 +19.92%
- Cac +17.35%
- Dow Jones +12.54%
- FTSE 100 British +1.67%
On December 13, the Dow Jones Industrial Average accomplished a remarkable feat by reaching a new all-time high, marking the first time since early January 2022.
This achievement signifies the extension of the Dow Jones' streak of consecutive years with at least one all-time high to 11.
The previous record streak spanned from 1989 to 2000, during which it recorded 12 consecutive years with at least one all-time high.
The years with the most all-time highs were:
In the last 129 years, in total, there were 55 years in which it achieved at least 1 all-time high and the other 74 occasions it did not.
S&P 500: Bullish 2024 Is in the Offing
The significance of the current situation lies in the fact that over 60% of all S&P 500 stocks have reached new 20-day highs. Such occurrences are rare, having only happened 15 times in the last 51 years.
Historically, the S&P 500 has consistently responded positively to this pattern, recording an upward movement one year later on all 15 occasions, with an average return of approximately +18%.
But that's not all. As it turns out, the S&P 500 blew out last November by +8.9%, its 18th best month ever. Well, history shows us that if we take every month in which the S&P 500 has risen more than +8%, the index a year later had risen virtually every time.
Stock market rankings/h2
This is the ranking of the world's major stock exchanges so far in 2023:
Investor sentiment (AAII)/h2
Bullish sentiment, i.e. expectations that stock prices will rise over the next six months, increased 4 percentage points to 51.3%. It is at its highest level since July 20, 2023 (51.4%) and remains above its historical average of 37.5%.
Bearish sentiment, i.e., expectations that stock prices will fall over the next six months, decreased 8.1 percentage points to 19.3%. It is at its lowest level since January 3, 2018 (15.6%) and remains below its historical average of 31%.
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