On Friday both the S&P 500 and the Dow Jones closed at new 50 day highs. 5 days ago, the QQQ closed at a new 50 day high. Throughout history, new 50 day highs have lead to more gains over an intermediate time frame.
The Rules
Buy the ETF/Index at the Close If
- It Closes at a New 50 Day High
- Sell X Days Later
All available ETF data was used.
Index data for the S&P and Dow goes back over 60 years. Data for $NDX starts at the end of 1985.
The Results:
The ETFs represent a smaller data set yet still offer plenty of samples. Let’s look at the index data, which contains substantially more data.
The huge $NDX gains are due to the tech boom. However, both $SPX and $DJI show a solid uptrend after new 50 day highs.
While I am still very concerned about the situation in Europe, I am being very careful not to ignore the strengthening U.S. indices. With positive seasonality coming soon, I’m beginning to think it is time to turn off the brain and just follow the trend.
Thanks for the info. That is quite compelling data.
Euro problems is good for stocks because all the money is going to flow into US. So what, some of tht goes into bonds&dollar. Strong dollar is only bad for stocks if it happens because money is disappearing or shifting from stocks. That isn’t the case. Euro is inflating causing migration of capital. The US govt will inflate away the interest payments to bond holders by more spending which will further boost economy. Dow 1milliom we go?
Wood, you are on top of your game. One minor suggestion I would make for this post, is to make the colors for the QQQ to correspond to the Nasdaq Index across both charts, and so on.
Thanks Red. Good catch! I’ll do that next time. Hope you are well.