An effective method to recognize uptrends is if the 50-day average is above the 200-day average.
73% of S&P 500 stocks have a 50-day average above their 200-day average.
This is the most substantial percentage since October 2021, indicating a significant uptrend in the market. pic.twitter.com/TkmEp1xD71
— Grant Hawkridge (@granthawkridge) February 26, 2024
🏆 Today’s Chart of the Day was shared by Grant Hawkridge (@granthawkridge).
- ‘The Golden Cross’ often fails as a timing tool or trading signal, but every longer-term rally starts with a golden cross. You can’t have a sustainable uptrend without the 50-DMA crossing above the 200-DMA.
- Grant points out that 73% of S&P 500 stocks are currently on a Golden Cross signal – the most since October 2021.
- It would be a red flag if this indicator were diverging, but it’s hitting multi-year highs, confirming the uptrend in the S&P 500.
The takeaway: This is just one of many data points to consider, and history doesn’t have to repeat itself. But, since the 1950s, this has consistently led to above-average gains with mild pullbacks in the remainder of the year.