Study: the S&P 500 has been very quiet. A slightly bullish sign for stocks

The S&P 500 has been pretty quiet despite all the scary-looking headlines on CNBC. The S&P has gone 10 days in a row without closing up or down 0.5%
This is the first such “quiet” streak in half a year.
In other words, low volatility has returned to the stock market.

As we’ve mentioned before, low volatility is a hallmark of bull markets (i.e. the market is in an uptrend). High volatility is a characteristic of bear markets.
Hence, when the stock market experiences low volatility for the first time in a long time, the stock market’s forward returns usually have a bullish lean.
Here’s today’s study: what happens next to the S&P 500 when…

The S&P goes 10 days in a row without closing up or down 0.5% (first such occurrence in 6 months).

Click here to download the data in Excel.


As you can see, the stock market’s forward returns have a slight bullish lean when volatility is very low for the first time.
This study supports our other recent stock market studies, which suggest that the U.S. stock market will head higher for the next 6-12 months.

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