In what has been the most range bound market in history, the S&P 500 is on the verge of another milestone of ‘nothingness’. Following Monday’s decline, the S&P 500 dipped below its 50-day moving average (DMA) after rising above it last Wednesday. With today’s move, the S&P 500 has now crossed (to the upside or downside) its 50-DMA 31 times in 2015. That means that the index has crossed its 50-DMA by an average of once every week! The chart below shows the number of times the S&P 500 has crossed its 50-DMA in each year since 1929. At 31 occurrences, 2015 is now tied with 1933 for the second most 50-DMA crosses since 1929. Further, if the index closes above its 50-DMA one more time this year, it will be tied with 1993 for the most crosses of the 50-DMA in a given year on record. Keep in mind that there are still nearly five more months left in the year!
For followers of technical analysis, the 50-DMA is often used to discern a security’s short-term trend; when the security trades above the 50-DMA, it is considered bullish and when it trades below that level it’s considered bearish. With all of the back and forth action so far this year, followers of this strategy who have bought upside crosses and sold downside crosses have been getting their clocks cleaned.