Overview
This week's analysis reviews recent market signals and technical indicators to assess the outlook for stocks over the next 1–5 years, using historical context and multiple market benchmarks. The data continues to support a bullish long-term perspective, though normal volatility should be expected.
Review of Recent Signals and Market Trends
- 41 recent breadth signals suggest any pullback to the 5745–5642 range on the S&P 500 is historically normal.
- As of June 6, 2025, charts and moving averages show the S&P 500 consolidating above key support levels and making new highs.
- 20-day moving average has risen above longer-term averages, reinforcing a positive trend.
- Tight clusters of moving averages highlight important support regions not currently threatened.
- April 2025 low is likely significant, with an 87% historical probability of sustainability.
Historical Analogues and Performance
- Similar technical patterns in 1983, 1995, 2003, and 2013 saw strong stock market gains 1–5 years forward.
- Median gain for the S&P 500 one year after these signals was 17.35%, and 74.2% after four years.
- Worst case in these analogues yielded 53.29% gains over five years.
Technical Indicators and Broader Market Signals
- NASDAQ technicals and Bollinger bands indicate potential for sustained upward movement rather than bearish reversal.
- Major indices (S&P 500, NASDAQ, Dow, NYSE composite) are all showing patterns unlike previous major bearish markets (2000, 2008, 2022).
- Most indicators (moving averages, volume, technical ratios) point to continued uptrends and improving breadth.
- Consumer, technology, and growth sectors are showing relative strength compared to value sectors.
Volatility, Risk, and Market Health
- Market volatility is normal and does not contradict the bullish case.
- Recent pullbacks have held above key moving averages, maintaining an encouraging technical posture.
- Credit markets (e.g., JNK) and materials sector (e.g., XLB) are also showing healthy signals.
Risk Management and Disclaimers
- None of the signals predict future events; they only suggest improved long-term probabilities.
- Viewers are cautioned not to confuse normal volatility with changes in long-term trend.
- Content is for informational purposes only and not investment advice.
- Viewers should consult with a qualified financial professional before making decisions.
Recommendations / Advice
- Maintain a patient and flexible approach, recognizing that volatility is a normal feature of bullish markets.
- Focus on long-term outcomes, using technical signals as probability guides, not guarantees.
- Use professional advice before acting on any market analysis.