Chart of the Day - Friday, December 20, 2024

🏆 Today's Chart of the Day was shared by Jason Goepfert (@jasongoepfert). 
 

• Despite falling -2.0% this week, the S&P 500 finished on a strong note Friday with a Bullish Engulfing candle. It undercut the prior month's low this morning, forming a potential Failed Breakdown.  
   
• Breadth was very strong today despite being persistently negative all month. Wednesday was the worst day of the year for breadth, while Friday was among the best. 
   
• Jason points out that forward returns for the S&P 500 have generally been bullish after cycling from its worst breadth day in the last 90 days to its best within a three-day period. Over the next three months, $SPX was higher 85% of the time, for a median gain of +7.3%. 
   

The Takeaway: Wednesday was the worst day of the year for breadth, but Friday was among the best. While this is just one of many data points to consider, it typically hasn't been bearish...