S&P 500: More Good News for Bulls | Ryan Detrick

On average, it is 18.7% higher a year later, 20 out of 20 times since 1976:

Performance of S&P 500 after more than 58% of components reach new 20-day highs.

When more than 58% of S&P 500 components hit a 20-day high, the index has historically risen by an average of 18.7% over the next 12 months, with a 100% success rate across 20 instances since 1976. Gains are less pronounced but still positive in the short term, averaging 1.7% (1 month), 5.6% (3 months), and 9.7% (6 months), with positive returns 80-85% of the time. The latest May 14, 2025, event (68% of components at a 20-day high) aligns with this historical pattern, suggesting a high probability of gains by May 14, 2026.

 

Historical May performance in post-election years (1950-2021) shows a typical pattern of strong gains in the first 6 trading days (average >1%), followed by a dip from days 6-9, and a rally through month-end. This contrasts with 2025 trends for major indices such as the NASDAQ, S&P 500, Dow, and Russell 2000. By mid-May, all indices had broken above their 200-day moving averages.

 

Can we get a pullback? 24% of NASDAQ 100 stocks are overbought with an RSI above 70, a threshold indicating potential price corrections; historically, since 2020, this condition has led to a 1-week pullback 55% of the time, with an average decline of 0.71%.

 

The VIX has dropped for 6 consecutive weeks, a rare streak historically linked to potential stock market pullbacks, as shown in the data from 1992 to 2024, where the S&P 500 averaged a -0.63% return one week later in similar scenarios. The S&P 500 tends to face short-term corrections, with historical data indicating negative returns in the following 1 to 4 days 63-78% of the time, suggesting a volatility spike may be imminent.

 

 

It wasn't long ago people were talking about the Death Cross in the SPX. Back then we pointed out that the last time the death cross occurred (2022), markets reversed aggressively and managed to overshoot the 200 day by around 3.5%. A similar overshoot now would take us to around 6k.

 

 

The dominant 82-day cycle suggests a peak in the ES around June 10, followed by a decline into early August. 

 

See also:

Namzes (December 27, 2024) - 2025 Outlook on S&P 500, Cryptos, Currencies, Metals & Energy.

V-Shaped Reversal vs Choppy Re-Test Bottoming Pattern | Subu Trade

Market bottoms are usually a process. They often involve choppy price action and possibly a re-test of the lows, instead of a V-shaped recovery back to all-time highs. Crash and re-test Patterns happened during the 2016, 2015, 2011, 1998, and 1987 crashes. In contrast, V-shaped recoveries to new highs—like those in early 2019 and post-COVID 2020—are less common. 

 

[...] Let’s review some 15–30% market declines from the past 40 years:

S&P in 2015.

S&P in 2011.

S&P in 2010.

S&P in 1998.

S&P in 1990.

S&P in 1987.

Markets don’t often rally straight back to all-time highs without pause. V-shaped bottoms typically require significant policy support. If Trump makes a deal and reduces tariffs on China, that could help trigger a V-shaped recovery.

S&P in 2018.

  

S&P in 2020. 

 

SPY in 2025.

V-shaped reversal or choppy bottom?

Overall, I lean toward a “choppy bottom” instead of a V-shaped recovery. Trump’s primary focus is on fighting China, the US’ top economic rival. As part of his trade negotiations with countries in Asia, Europe, and North and South America, he may push for the US’ allies to impose tariffs on China as well. If successful, this could effectively isolate China from the global trade system, forcing other nations to choose sides. Given that the US is the world’s largest consumer market (a major net importer) and China is the biggest net exporter, most countries would likely align with the US because it is in their economic interest to do so.

Bottomline: the current rally should continue, but with significant volatility. While a V-shaped recovery is possible, it is not the most likely scenario.

Quoted from:
Subu Trade (April 12, 2025) - Markets Report: Is the Bottom in? Here’s what history says. Volatile vs. V-shaped bottom.

Please, It’s Too Much Winning. We Can't Take It Anymore, Mr. President!

 » We're gonna win so much that you may even get tired of winning! You’ll say:

"Please, please, it’s too much winning. We can't take it anymore, Mr. President. It’s too much!" 

And I’ll reply: "No, it isn’t! We have to keep winning, we have to win more! «

 

 

POTUS 45 | 47 

 

» The US is playing a zero-sum game. China is committed to opening ever wider to the world. « 

  

» May he continue to work hard for the ultimate mission entrusted to him by the Party. « 

 

 » Thursday and Friday were 2 consecutive days in the S&P of more than -4.5% declines,

and the NASDAQ fell more than -5%. This only happened during huge crashes. What's next? «

 

» There’s a fantastic research paper called “Buffett’s Alpha”, which analyzes the “factors” that Buffett tilts towards. Buffett is exposed to the Betting-Against-Beta and Quality-Minus-Junk factors, with 1.7x leverage. I highly recommend you read this. «

 

  SubuTrade: Markets Report. Bear Markets & Trade Wars, April 05, 2025.

 

» Hurst Cycles: Short term cycles - 2-3 days higher for wave 4 and 20d high then another 2-3 days lower for wave 5

and 20d low will fit perfect. I think we had a 20w high late March and are now heading lower into the 20w low. «
Krasi: Weekly Preview, April 5, 2025.

 

Philip Hopf (April 3, 2025) - Is Trump crashing the world economy now? (video)

 

See also:
TPR (April 4, 2025) - 10-Day Cycle Expected to Bottom on Tuesday, April 8, Around 8:30 a.m.