In the depths of the summer of 2010 sell-off, I discussed the 20 period monthly moving average (orange line below) on the S&P 500. For whatever reason, it has been a reliable reference point for bull and bear markets alike. So long as it kept rising, the bull was intact, and vice versa for bears. We would also expect several tests of the 20 period monthly as well during the course of the cycle. Even if there was a marginal breach, the most important aspect to consider was, and is, whether it was rising or declining.
One of the characteristics, at many times, of this current bull market that began in March of 2009 was how steep we would climb, and how far away from the 20 period monthly we would get. Well, lo and behold, a look at an updated monthly reveals that the 20 period monthly moving average is suddenly on the verge of finding us, as it is currently above 1202…and rising.