Two market history studies are telling very different stories about this rally.
The first one is giving bulls permission to stay in the trade. The SPDR S&P 500 ETF (SPY) just flashed a rare weekly momentum signal, closing above its upper Bollinger Band for the first time in more than a year.
In plain English: The S&P 500 ETF just surged above its normal trading range — something it’s only done seven prior times since launching in 1993.
That can sound overheated, but the historical read from Astra Insights is more forgiving. Similar signals have often been messy over the next few weeks, but the longer-term returns have been strong, with the ETF positive nine months and one year later in every prior instance shown.
That’s the bull case in one chart: Strength tends to beget strength.
The second study is where the story gets trickier.
The S&P 500 (^GSPC) has been hitting records with fewer than 60% of stocks trading above both their 50-day and 200-day moving averages, according to Bespoke Investment Group, circulated by the Market Ear.
The only other period where that combination showed up was from December 1998 through March 2000 — the final stretch of the dot-com melt-up.
That doesn’t mean the market is necessarily due for a repeat of the 2000 sell-off. It does mean the rally is starting to rhyme with one of the most famous narrow, momentum-led markets in history.
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