LIVE MARKETS-S&P 500 vs its 200-DMA, and what it might for 2025 - Bespoke

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S&P 500 VS ITS 200-DMA, AND WHAT IT MIGHT FOR 2025 - BESPOKE

With just a few trading days left in the year, it appears to be a pretty safe bet that the S&P 500 index .SPX, which is now around 6,035, and up 26.5% YTD, will close out 2024 above its 200-day moving average (DMA), which is something it has done for the entirety of the year.

The rising 200-DMA now resides around 5,540.

Bespoke Investment Group's Paul Hickey says there have been 11 prior years since 1952 (when the NYSE went to the current five-day trading week), that the S&P finished every trading day of the year above its 200-DMA.

"This essentially means the index trended higher all year with no significant corrections," writes Hickey in a note.

Bespoke then took a look at how the S&P performed in the following year.

According to Hickey, the average next-year change following these years has been a gain of just 4.6%, which is about half the historical average annual gain of 9.2%.

The last two times the S&P 500 traded above its 200-DMA all year were 2017 and 2021. Following each of those strong up years (+19.4% and +26.9%), the benchmark index took a breather in the following year.

In 2018, markets trended slightly lower with a big drop to finish out the year, while in 2022, the S&P entered a "nasty" bear market that included a peak to trough decline of more than 25% from the start of the year through mid-October.

(Terence Gabriel)

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