Study: NASDAQ leading the S&P is a bullish sign


The NASDAQ and S&P are both up this year from January – May. However, the NASDAQ has massively outperformed the S&P by more than 6%.
Here are all the historical cases in which the NASDAQ outperformed the S&P by more than 6% from January-May (while both indexes are positive), and what happens next to the S&P for the rest of the year.

Click here to download the data in Excel.
Here are the historical cases in detail.
2017
The S&P trended higher throughout the rest of the year.

2009
The S&P trended higher throughout the rest of the year.

2003

1999
The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

1996
The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

1991
The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

1983
The S&P trended sideways throughout the rest of the year.

1979
The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

1978
The S&P trended sideways throughout the rest of the year.

1972
The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

Conclusion

This is a medium term bullish sign for the stock market. It suggests that the stock market will trend higher throughout the rest of the year, even though it may do so in a choppy manner.
There was only 1 loss at year end out of the 10 historical cases. This was a tiny loss: -1.16%
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