Stocks Bounced, As Expected

This is the fourth time since Brexit that stocks bounced right off of this long-term trendline. Is it possible that this instance will be a buying opportunity for suitable investors like the other three periods were? One thing is for sure: the trade war concerns could prove to be an opportunity when all is said and done.

What would it mean if the 200-day MA was finally breached? “This is now the fourth-longest streak above the 200-day moving average since World War II,” said Ryan Detrick, Senior Market Strategist. “The reality is that historically once long streaks finally end, the bullish momentum may be far from over, and more gains could be in store for stocks.”

As the figure below shows, a year after the previous four-longest streaks ended, stocks were in the green. In other words, when this bullish streak ends (and it will eventually), the bull could still have some tricks up his sleeve.

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The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

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The 200-day moving average (MA) is a popular technical indicator which investors use to analyze price trends. It is the security or index’s average closing price over the last 200 days.

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