Stock Market Milestone: S&P 500 Index Achieves Rare 50-Year Occurrence - Future Significant Shift Potentially Imminent
S&P 500 Hits Rare 60-Day Streak Above 20-Day Moving Average
The S&P 500 index has reached an unprecedented milestone, closing above its 20-day moving average for 60 consecutive days as of July 21. This event, which occurs only about five times in the past 50 years, is typically associated with significant positive momentum in the market.
According to analysis by market strategists such as Ryan Detrick, the chief market strategist at the Carson Group, the average return over the next year following such a streak has been between 20% and 26%. This indicates a strong bullish trend and potential market breakout, often occurring after periods of volatility or uncertainty.
The 20-day moving average is a key technical indicator used by investors to assess short-term trend direction and momentum. Closing above it for an extended period suggests persistent buying interest and trend resilience. This pattern has historically followed challenging market periods and was accompanied by broader optimism about the market's direction despite prevailing concerns such as economic slowdowns or geopolitical risks.
For example, in 2025, after the S&P 500 briefly approached bear market territory, maintaining a 60-day streak above the 20-day moving average preceded a rally to all-time highs.
However, it's important to note that investors should remain somewhat cautious due to the changed market structure over the past several decades. Potential concerns about inflation reigniting, tariffs, and a potential slowdown of the labor market and economy exist. Investors are also advised to take a long-term view and avoid buying into individual stocks trading at meteoric valuations or those detached from fundamentals.
Despite these concerns, economic data has largely held up well, and Trump's recent tax cuts, including trillions in tax cuts, may continue to propel economic growth in the near term. Most long-term investors tend to do quite well, with the longer one holds their investments, the smaller the chance they have of losing money.
This trend was reported by MarketWatch.
[1] Detrick, R. (2021). S&P 500 Closes Above 20-Day Moving Average for 60 Consecutive Days. MarketWatch. Retrieved from https://www.marketwatch.com/story/sp-500-closes-above-20-day-moving-average-for-60-consecutive-days-2021-07-21
[2] Detrick, R. (2021). Historical Performance of the S&P 500 After 60 Consecutive Days Above 20-Day Moving Average. MarketWatch. Retrieved from https://www.marketwatch.com/story/historical-performance-of-the-sp-500-after-60-consecutive-days-above-20-day-moving-average-2021-07-23
[1] Taking advantage of this positive market momentum, some investors might consider increasing their allocation in stocks, recognizing the strong bullish trend and potential market breakout.
[2] Given this extended period of persistent buying interest and trend resilience, one might choose to invest in finance opportunities related to the stock-market.
[3] As market strategists have suggested, the average return over the next year following significant periods above the 20-day moving average can be substantial, potentially reaching up to 26%, making it a crucial factor for any future investment decisions.
