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Below is a chart of the S&P 500 going back two years, with the index’s 50-day moving average and 200-day moving average included. As you can see, the S&P has moved well above both its 50-day and 200-day at this point, and it’s currently trading at the top of an uptrend channel that began forming over a year ago.
Below is a chart showing the 50-day moving average spread for the S&P 500 since October 2008. This simply measures the percentage that the S&P’s price is trading from its 50-day. While there’s been a lot of talk recently about how extended the market has gotten, at +3.45%, the S&P isn’t really trading that far above its 50-day on a relative basis. There have been multiple occasions over the the last five years where this reading hit 5%.
While the index isn’t that far above its 50-day, it has been trading above its 50-day for quite some time now. In fact, it has been 71 trading days since the index last closed below its 50-DMA. As shown in the chart of these streaks below, 71 trading day streaks haven’t been that uncommon either. However, given where the index is trading at the moment, it’s going to take a pretty significant drop for the streak to break, meaning at this point we’ll likely surpass the 80-trading day level that hasn’t been topped since 2010.
And while the S&P isn’t that far extended above its 50-day, it has moved pretty far above its 200-day. At +8.57%, the S&P’s 200-day moving average spread is at its highest level since mid-2014. Notably, the 200-day spread trended lower from early 2013 through late 2015, but since the start of 2016, this reading has been trending higher.
The S&P has now closed above its 200-day for the last 165 trading days. Below is a chart showing streaks of closes above the 200-day going back to 2008. It’s going to take a massive rally from here to eclipse the 477 trading day streak that we saw from late 2012 to late 2014!