The S&P 500 is riding high. Resist the urge to time a pullback

107386392 1710266152072 NYSE Traders Photo 20240312 CC 6

107386392 1710266152072 NYSE Traders Photo 20240312 CC 6

The S&P 500 has been on an epic win streak, closing out the first quarter with a 10% year-to-date increase and a remarkable 25% rise in the past five months. Such a run is rare, with only seven other periods since 1950 seeing better performance. Despite predictions of an imminent pullback, momentum remains strong, with the market trading well above its 200-day moving average. Historical data shows that after such epic runs, the market tends to be higher six months down the road most of the time.

Tech has been a driving force behind the market’s rise, but other sectors like Communication Services, Energy, Financials, Industrials, and Health Care have also seen significant gains. Real estate is the only sector down this quarter. Market breadth has been expanding, with around 70% of the S&P 500 in the green this year. The advances outweigh the declines in the S&P 500 and the broader Russell 1000 index, indicating a strong market advance.

Market watchers advise against trying to time the market or predict the timing and depth of any potential pullback. It may be more profitable to ride out the gains than to attempt to time the markets, as markets tend to perform better after significant moves. Stick around and enjoy the gains rather than trying to outsmart the market.

The S&P 500 has had an impressive first quarter, with a 10% year-to-date gain and a 25% increase in the past five months. Such a run is rare, with only seven other periods since 1950 showing better performance. Despite predictions of an imminent pullback, momentum remains strong, with the S&P 500 trading significantly above its 200-day moving average. Historically, after similar epic runs, the market tends to be higher six months later, indicating the potential for further gains. Market breadth has been expanding, with sectors like communication services, technology, energy, and financials showing strong advances. Market watchers emphasize the importance of broader market strength in sustaining a market rally. While some anticipate a fall after such significant gains, trying to time market declines may not be profitable, as markets tend to do better when there have been large moves. Therefore, holding onto gains and staying invested may be more beneficial than attempting to predict market movements.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

scroll to top