We noted in our Chart of the Day last Friday that the S&P 500 was set to close above its 200-day moving average for the first time since the end of 2015. The S&P did indeed close above its 200-day moving average on Friday, marking the end of a 48-trading day streak of closes below.
Below is a table showing all S&P 500 streaks of 40+ trading days (essentially 2+ months) of closes below the 200-day moving average over the last 50 years. The most recent streak that just ended was the 20th streak of its kind, and for each of the prior streaks, we highlight how the S&P 500 performed in the week, month, and three months following the day that the streak ended.
As shown, over the next week, the S&P has averaged a gain of 0.33% (median +1.33%) with positive returns 63% of the time. Over the next month, the index has averaged a gain of 0.68% (median +1.56%) with positive returns 63% of the time. And over the next three months, the index has averaged a gain of 3% (median +3.31%) with positive returns 68% of the time.
One thing you’ll notice in the table is that more recent streaks going back to 1994 have seen the S&P decline more than it has rallied in the week and month following the day that the index closed back above its 200-day. Only time will tell how the market performs this time around.
We’re currently working on a larger, more in-depth report on how the S&P 500 performs when it’s above and below its 200-day moving average. Start a free 14-day Bespoke research trial to see this report and all of our other market coverage over the next two weeks.