The S&P 500 Is Back on the Path to New Highs

I spent decades of my life building proprietary systems for Wall Street’s elite…

It took countless hours to squeeze everything I possibly could out of the financial data. But all the hard work paid off…

I was able to take an early retirement in the early 2000s. And I planned to spend my days relaxing and playing tennis in Connecticut.

Of course, longtime readers know that those plans soon changed

The 2008 financial crisis wrecked my wife Sandy’s retirement nest egg. And it brought me out of my own retirement…

I wanted to help everyday investors like Sandy with the best set of quantitative tools on the market. And in 2011, the Power Gauge was born.

Today, our one-of-a-kind system helps thousands upon thousands of everyday investors. And my team and I still spend hours testing, prodding, and twisting to get the most out of the latest available data.

But that doesn’t mean I’m against making things as easy as possible…

Simple indicators are powerful.

And the granddaddy of simplicity is flashing a major turning point in the S&P 500 Index today.

In fact, this indicator triggers before every long-term “bullish” run in stocks. It’s guaranteed to happen based on the math and how the market works.

As this indicator happens again, it unlocks the potential for new highs in the S&P 500…

Folks, we’re looking at the S&P 500’s 200-day moving average (“DMA”) today.

When it comes to financial indicators, the 200-DMA is about as straightforward as it gets. And importantly, it helps people answer one of the most important investing questions…

Is the price action of the asset I’m looking at trending up or trending down?

It’s easiest to see what I mean on a daily chart of the S&P 500. Take a look…

This chart covers the past four years. You can see the COVID-19 crash in early 2020, as well as the ensuing recovery. And the blue line tracks the S&P 500’s 200-DMA over that span.

The indicator’s name explains how it works. And as I said, it’s as straightforward as it gets…

Each point on the blue line represents the S&P 500’s average price over the past 200 trading days.

This is an incredibly powerful indicator. It allows us to compare the current price of the index with how it has performed in the recent past.

Now, the number 200 isn’t magical or anything. It just represents about a year’s worth of data. And that makes it a “long-term average” of the S&P 500.

The important part is that the 200-DMA allows us to see a smoothed-out version of the S&P 500’s trend. And that’s where this indicator gets interesting…

You see, after the COVID-19 crash in 2020, the S&P 500 soared. And as it did, you can see that the 200-DMA pointed up and eventually soared alongside the market.

In other words, the S&P 500’s long-term trend had serious upward momentum.

Today, we’re seeing something equally important…

Notice that the S&P 500 is once again above its 200-DMA. What’s more, after the long-term trend flattened and turned lower throughout 2022… it’s starting to point up again.

Remember, the 200-DMA represents the index’s long-term average. So even a small directional change means a major shift is happening.

That’s the case today. It might seem simple. But that’s the point…

For the first time since 2022, the S&P 500’s long-term trend is up. And this “bullish” signal occurs before every long-term run higher for stocks.

In the end, the S&P 500 is on the path to new highs once again.

Good investing,

Marc Chaikin

Scroll to Top