Chart of the Day - Wednesday, May 27th, 2020

Today’s Chart of the Day was shared on Twitter by Ed Clissold (@edclissold) of Ned Davis Research. Bulls won a major victory today with the S&P 500 closing above its 200-day moving average for the first time in 57 trading days. In addition to this bullish milestone, Ed points out that over 90% of stocks within the index are above their 50-day moving average. The black arrows mark the 19 prior signals where this breadth indicator rose above 90% after dipping to at least 75%. A year later (253 trading days), the S&P 500 was higher 19 out of the 19 times, with a median gain of 16.28%. Even the short-term returns have been positive, with a median gain of 0.79% 10-days later. Ed also noted, “This is an intermediate-term breadth gauge, so it is going to be late. It has fired a median of 1.8 months after bear market lows. This one was 2.0 months.”