Chart of the Day - Wednesday, May 10, 2023

Today’s Chart of the Day was shared by Todd Sohn (@Todd_Sohn). It's a monthly chart of the S&P 500 over the past 77 years, with a 12-month rate of change indicator in the lower panel. Todd points out that this momentum indicator flipped into positive territory last month after spending the past year in negative territory. The S&P 500 was higher one year later in all ten prior occurrences by an average of 12.6%. Of course, this doesn't guarantee that the S&P 500 will be higher a year from now. But it does strengthen the bull case, and it's constructive to see momentum improving like this.