Market Direction Mid Week Update

Market Direction: sign-up and subscribe alert issued ?/?/?

Sign up and register for the latest stock market Direction Alert news. Click here http://stockmarket-direction.com/wp-login.php?action=register

It’s been a long time since the S&P 500 closed at a 52-week high—ending that drought could be a potentially bullish sign for the stock market in a summer fraught with uncertainties, according to an analyst at Bank of America Merrill Lynch. 

“The data show that when the S&P 500 closes at a new 252-session high [52-week high] after not closing at a new 252-day high for 300 or more calendar days—a long pause, the implications are very bullish and new highs should not be feared,” Stephen Suttmeier, chief equity technical strategist at Bank of America Merrill Lynch, said in a Tuesday report.

The S&P 500 SPX, +0.33%  was changing hands Tuesday at 2,117.30 after notching a nearly 11-month intraday high. The index’s 52-week high stands at 2,128.28, a level hit on July 20, 2015. The index is less than 1% away from its all-time closing high of 2,130.82 set on May 21, 2015.

As of June 6, the large-cap benchmark had gone 382 days without closing at a new 252-day high, he said.

The S&P 500 SPX, +0.33%  has set new highs after a long pause 23 times since 1929, and the move typically heralds a period of above average returns, according to Suttmeier.

“In fact, the 250-day average return after this signal is 15.6% (14.8% median), with the S&P 500 up 91% of the time,” he said.

The strategist also noted that stocks continued to be resilient in the face of “bad news” as market’s momentum improves. Expectations that the Federal Reserve will raise interest rates as early as this summer, as well as conflicting assessments of the U.S. economy in the wake of mixed economic data, have contributed to heightened uncertainty in the market.

Nonetheless, stocks generally fare well between June and August which is the second best three-month period of the year going back as far as 1928 with an average return of 2.97%, he said.

“This technical backdrop suggests a continued climb up a wall of worry. Many of these worries are known, feared and part of the daily market narrative,” the analyst said.

Suttmeier said that if the S&P 500 can close above the 2,085-to-2,110 range for a sustained period, its chance of breaking out improves and the index has the potential to trade in record territory at 2,150 to 2,175.

$tockMarketDirection proprietary model is currently sign-up and subscribe. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.

The all-time subscribe since our initial recommendation to go sign-up and subscribe this market. Here is how the markets have performed:  

Stock Market Direction Recommendation (?/?/?)
Dow Jones	sign-up and subscribe	?/?/?
Nasdaq	sign-up and subscribe	?/?/?
S&P 500	sign-up and subscribe	?/?/?

Related Link: http://www.stockmarket-direction.com/