S&P 500 triggers signal with perfect track record for calling end of bear markets

Recent momentum in stock trading has triggered a historically fail-safe sign that the bear market in stocks may be over. When advancing volume on the New York Stock Exchange is 87% of total trading for two out of three days following a 52-week market low, the S & P 500 has never been negative a year later, according to Jason Goepfert, chief research analyst and founder of SentimenTrader. In the world of arcane market trends, this is right up there. But Goepfert has plotted the returns out, and the trend, which has been in place over the past three trading days before Wednesday, seems to work. That came after the index hit its 52-week low in mid-June. In fact, the results are pretty good: a median 23% return a year out from the data point is triggered, with 100% accuracy. Even six months later, the index is up 77% of the time. “The bear market is over,” Goepfert said in a follow-up tweet. The trend “has a perfect track record.” However, he attaches two big caveats to the statements. On the first point, he notes, “Of course, this doesn’t preclude short-term losses. Of course, I can’t predict the future. Of course, this time is different. Of course, it would be great to have a larger sample size.” On the second point, he says, “Beware anything that seems ‘perfect.'”