Study: what happens next when the stock market’s momentum is weak during an uptrend
The stock market’s momentum has been weak since January 2018 (because the stock market has been in a correction).
The S&P is up 2 weeks in a row this week for only the 3rd time in 4 months, while the S&P is still in an uptrend (i.e. is above its 52 week moving average). In other words, the S&P’s momentum has been weak over the past 4 months – it has rarely gone up for 2 weeks in a row.
Here are the S&P 500’s historical returns when this happened.
Click here to download the data in Excel.
The S&P 500’s forward returns are positive 81% of the time on a 2 week forward basis. This suggests that even if the stock market does have some short term downside, this short term downside will be limited.
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