At the end of June 2009 the S&P 500 200-day moving average increased compared to the previous day’s level for incredibly the first time in a year and a half! That had been one of the worst and longest streaks of consecutive days with a declining 200-day moving average as that streak came to an end.
So for all the naysayers that were then doubting that the rally was for real because it was missing the confirmation signal because the 200-day moving average was still declining, now know in hindsight that it was a major turning point for the markets.
So what else does history have to wreak havoc on the bears? Following the end of this streak in the past, going back eighty years, the S&P 500 has averaged a return of an amazing 20% during the end of the prior five worst streaks when we finally broke the declining 200-day moving average.
So back then in late July 2009 the S&P closed at 980 and went up as high as 1080. A 100 point increase in the S&P 500. However, applying the historical data mentioned above, the end of this bull run should occur at 1180 which would be that 20% historical gain!!
I don’t know for sure, but history seems to be on the side of a continued bull run. This S&P 500 1180 level corresponds with the 1160 level where the S&P found initial support after the Lehman collapse. This former area acted as support, and should now act as the final front or resistance for this juggernaut of a bull run.
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