The S&P 500’s momentum is not going to fade any time soon – SentimenTrader
Although the S&P 500’s (SP500) $4T rally may concern investors, momentum is not expected to slow, according to the relative strength index (or RSI) — a technical indicator that measures price momentum and has “an undefeated record.”
The RSI of the S&P 500 (SP500) closed above a value of 50 for 100 straight trading sessions on Wednesday’s close, data by SentimenTrader said. Every time the index finished at that level, the S&P 500 (SP500) was higher over the two-, three-, six-, and 12-month periods.
As an example, the RSI was above its 50 mark early in November just as the S&P 500 (SP500) gained over 27% off the October low.
According to SentimenTrader Analyst Dean Christians, “once the RSI indicator persists above 50 for 80 consecutive trading sessions, the outlook for the world’s most benchmarked index was nothing short of spectacular, So, despite all the calls for corrections and bear markets, history suggests the upside momentum persists.”
Also, since 1943, this has occurred nine times, including the current run, which is the sixth-longest such streak in history, said Christians.