Based in Kingsport, TN
iInvest® Stock Market ALERT
Bullish Intermediate and Long-Term Signals seen on S&P 500
We have seen some bullish developments this year, both from a Technical and Quantitative Analysis standpoint. One of the best Quantitative Analysts we have known over the years is Rennie Yang from Markettells®. He has pointed out the 2 studies below, including the “4 Consecutive Up-Month” and “5-Day Thrust” pattern.
The iInvest® Team continues to recommend and remain fully invested up to each client’s individual risk level and portfolio recommendations.
You can view a couple of our alerts from earlier this year here:
4 Consecutive Up Months
The S&P 500 had its fourth consecutive up month in April, the 1st time in over four months. Since 1970, there have been 28 separate occurrences of this happening, and only one led to a lower S&P 500 one year later. The average gain was 15%.
S&P 500 – 4 Consecutive Up Months in over 4 Months:
5-Day Thrust Pattern
For the second time this year, the S&P 500 triggered a bullish five-day thrust at last Friday’s close. An “upthrust”, which is what occurred 5 days in a row, is defined as the close of the day being above the previous day’s trading high.
There have been over 24 closed signals since 1980, and the S&P500 was higher one year later in every case but one. The one loss was under 1%, while the average gain was 17%.
Two 5-day Thrust Patterns within a year:
Recent Institutional buying
We picked up a cluster of Institutional “Smart Money” Buy Programs during the last hour of last Thursday’s session between 2810-2820. This is the first buy program cluster of 2019. While not a “major” cluster, these standard clusters have generally been a good indication that an intermediate-term bottom is nearby. While these can be early and/or wrong in terms of calling a bottom, in general they are normally very accurate. Over 43 separate days in which a cluster has been seen, the S&P 500 was higher one quarter later 38 times (88%). The average gain was over 7.5%.
Institutional Buy Programs of the past:
38.2% Retracement/Pullback, Inverse Head & Shoulders Forming
S&P 500 hit’s a 38.2% Fibonacci Retracement (pullback) from the December 2018 lows, at the same time a “right shoulder” is formed on an Inverse Head & Shoulders Continuation Pattern. This is happening on most major U.S. Indices, including the NYSE and Russell 2000. This is bullish, especially with all the other supporting evidence of higher prices ahead.
S&P 500 hits 38.2% pullback, forms Right Shoulder:
All indications point towards a significant bottom forming last week on the S&P 500, and the US stock market looks good on both an intermediate-term and long-term basis. This could change in the weeks ahead; however, the iInvest® Team recommends staying fully allocated, according to each client’s individual portfolio models.
Written by Craig Dillon
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