LIVE MARKETS-S&P 500 index: Have we seen liftoff?

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S&P 500 INDEX: HAVE WE SEEN LIFTOFF?

It's been a little over a month since the market's April 8 cycle lows on a closing basis. Since then, the indexes have rocketed.

Indeed, over the 24-trading day (td) period since April 8, the S&P 500 index .SPX has thrust higher by 18.14%. The Nasdaq .IXIC has surged even more, it's up 24.51%. These are the biggest rolling-24 td rallies since late April 2020, which was coming out of the pandemic panic bottom.

Looking back over time, when the S&P 500 index .SPX has rallied more than 18% over this short period, it has, on average, preceded even greater multi-month gains:

Using LSEG data, and looking back to 1928, and prior to Tuesday, the SPX has only advanced more than 18% over 24 tds, 129 times. This phenomenon occurred 108 times between 1928 and late-1938.

Interestingly, there was a 36-year hiatus before it happened again in late 1974. Since 1974, and prior to Tuesday, it's happened 21 times.

And since 2000, and prior to Tuesday, it's happened 11 times.

Since 1928, the average rolling 24-day change in the S&P 500 is +0.74%. About 60% of these periods have been positive.

Meanwhile, since 1928, in the wake of a more than 18% SPX jump over 24 tds, the average index change looking forward 90 and 180 tds has been +3.7% and +11.9%. The win percentages are 58% and 78%.

However, since 1974, in the wake of a more than 18% SPX rally over 24 tds, the average index change over the next 90 and 180 tds has been +15.5% and +27%. The win percentages have both been 95%.

And since 2000, in the wake of a more than 18% SPX rally over 24 tds, the average index change over the next 90 and 180 tds has been +18% and +29%. The win percentages have both been 91%.

Thus, despite the potential for some instability over the very short-term to digest what may be a too-far, too-fast move, by this measure's more modern behavior, looking forward toward year-end and into early next year, bulls may be in orbit.

(Terence Gabriel)

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