Congrats, bulls! After dipping below its 200-day moving average on March 10th, the S&P 500 reclaimed it yesterday—just 14 days later. Historically, that’s a fast recovery. Since 1970, outside of recessions, the S&P 500 has typically spent 23 days below the 200-day after crossing it, making this snapback notably swift.
Even more impressive? The gains. The index rose 2.6% from the day it fell below to yesterday’s close, marking the 15th strongest return for such a move since 1970 (out of 164 instances). So, what’s next?
The data offers clues. In similar strong recoveries, near-term returns shine: the average one-month gain is 2.2% (vs. the historical 0.7%), with three-month returns also outpacing norms. Crossing back above the 200-day often signals the “all-clear,” easing fears of a sharp downturn. But longer term? Twelve-month returns, while positive, tend to lag historical averages—hinting this aggressive rebound might signal late-stage bull market cracks.
My take: bullish short-term. With this momentum, washed-out sentiment, oversold conditions, improving seasonality, and (hopefully) fewer tariff shocks, stocks have fuel to climb. Looking further out, though, flexibility is key. Markets evolve, and staying nimble matters.
