From the desk of Dan Seder, CFA, CMT, CFP®
Is there a disconnect between the stock market and the real economy? While some wait for a “double-dip” in the S&P 500, underlying stock performance suggests the future is bright. Recently, more than 90% of S&P 500 stocks have pushed above their respective 50-day moving averages. According to Ned Davis Research, the critical threshold of 90% has been breached only 19 other times in the past. In 18 of 19 instances, the S&P 500 increased over the next 6-months. On average, the index gained 17.3% over the 12-months following this signal. Despite a sluggish economy, is missing the upside in stocks the biggest risk investors currently face?