Source: Jin10 Data
This indicator has an accuracy rate of 100% in predicting the stock market trend after one year, and currently suggests that the S&P 500 index is expected to rise to 7,000 points.
A super rare stock call indicator has just appeared, indicating that the S&P 500 index still has greater upside potential after rising 61% since October 2022. In the components of the S&P 500 index other than super large technology stocks, stock prices have risen sharply this Tuesday, triggering the Whaley Breadth Thrust indicator. According to data compiled by AllStarCharts analyst Grant Hawkridge, this is the 15th time this indicator has been triggered since the launch of the S&P 500 index in 1950. Hawkridge explained on "X": "When the ratio of the number of stocks that have risen for five consecutive days on the market to the number of stocks that have fallen for five consecutive days is about 3:1, the Whaley Breadth Thrust indicator will be triggered." In other words, when the breadth of the stock market goes from extreme contraction to extreme expansion in a short period of time, this bullish indicator will be triggered. The historic rise in small-cap stocks is driven by a combination of weak CPI reports in June, the prospect of a Fed rate cut, and an increase in the probability of Trump winning the November election. The significant importance of the Whaley Breadth Thrust indicator lies in its accuracy in predicting the stock market trend six months later, with an accuracy rate of up to 93%, and 100% accuracy in predicting the stock market trend one year later. In other words, the stock market has never declined one year after the Whaley Breadth Thrust indicator is triggered. After triggering the indicator, the S&P 500 index has an average one-year return of 23% and an average six-month return of 17.4%. That is to say, the S&P 500 index is expected to rise to nearly 7,000 points. This is another less subtle clue that the US stock market is poised to rise. It is indeed strange for the breadth to expand when the stock market is at or near historic highs, as this typically happens at the end of a bear market. However, Carson Group chief market strategist Ryan Detrick told Business Insider via e-mail on Wednesday: "We also understand the bounce in small-cap stocks is because many stocks [previously] didn't truly participate in the bounce."
This Tuesday, the component stocks of the S&P 500 index other than super large technology stocks saw a significant increase in prices, triggering the Whaley Breadth Thrust indicator.
According to data compiled by AllStarCharts analyst Grant Hawkridge, this is the 15th time the Whaley Breadth Thrust indicator has been triggered since the launch of the S&P 500 index in 1950.
Hawkridge explained on "X": "When the ratio of the number of stocks that have risen for five consecutive days on the market to the number of stocks that have fallen for five consecutive days is about 3:1, the Whaley Breadth Thrust indicator will be triggered.
In other words, when the breadth of the stock market goes from extreme contraction to extreme expansion in a short period of time, this bullish indicator will be triggered. The historic rise in small-cap stocks is driven by a combination of weak CPI reports in June, the prospect of a Fed rate cut, and an increase in the probability of Trump winning the November election.
The significant importance of the Whaley Breadth Thrust indicator lies in its accuracy in predicting the stock market trend six months later, with an accuracy rate of up to 93%, and 100% accuracy in predicting the stock market trend one year later. In other words, the stock market has never declined one year after the Whaley Breadth Thrust indicator is triggered.
After triggering the indicator, the S&P 500 index has an average one-year return of 23% and an average six-month return of 17.4%. That is to say, the S&P 500 index is expected to rise to nearly 7,000 points. This is another less subtle clue that the US stock market is poised to rise.
It is indeed strange for the breadth to expand when the stock market is at or near historic highs, as this typically happens at the end of a bear market. However, Carson Group chief market strategist Ryan Detrick told Business Insider via e-mail on Wednesday: "We also understand the bounce in small-cap stocks is because many stocks [previously] didn't truly participate in the bounce."
The last time the Whaley Breadth Thrust indicator was triggered was on November 3. Since then, the stock market has surged nearly 20%. Before that, the indicator was triggered in June 2020, January 2019, and September 2009.
Editor/Lambor