Slow and steady has returned to the stock market. This is a bullish sign


Traders often “guess” whether the stock market’s “price action” is bullish or bearish. Traders should replace “guessing” with quantitative studies. You can use quantitative studies to quantify “price action”.
Slow and steady has returned to the stock market. The S&P 500 has gone up 10 out of the past 12 weeks.

This is historically a medium term and long term bullish sign for the stock market. Why?
Because major market tops (before bear markets and “big corrections”) are marked by increase volatility. I.e. the stock market rallies before a major market top, but the rally becomes a lot choppier because an increasing amount of traders/investors are becoming bearish.
Here’s what happens next to the S&P 500 when the S&P goes up 10 out of the past 12 weeks for the first time in 9 months (i.e. right now).

Conclusion

As you can see, the return of “slow and steady rallying” is a medium term and long term bullish sign for the U.S. stock market.
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