When the percentage of S&P 500 stocks trading above their short- and medium-term has cycled quickly from low to high, it never failed to lead to long-term gains over the next year.
Why we say that?
If we correlate the percentage of S&P 500 stocks above their10-, 50-, and 200-day moving averages of the 50 days since June low to every 50-day rally off of a one-year low since 1928, the rally off of the June 1926 bottom showed the highest value of a 0.83 correlation ...