The Pct. Pos. Trend for SPX (^PTSPX) and MID (^PTMID) each reversed up into Xs.

Domestic equity markets have seen a further movement to the upside over the first few weeks of October, as shown by the 3.39% gain posted by the S&P 500 Index SPX from the end of September to market close last Friday (10/9). This improvement has also been reflected on many of the equity-focused indicators we track on the NDW platform, such as the bullish percent charts that reversed up at the beginning of the month. The continued strength has led to further follow through on some of the positive trend indicators, including the Percent Positive Trend for SPX ^PTSPX and MID ^PTMID, which each reversed back up into a column of Xs after the market close on Friday. As a refresher, these charts track the percentage of names in the S&P 500 and S&P MidCap 400, respectively, that are currently trading above their bullish support lines, or in an overall positive trend. The PTSPX chart saw a reversal down into Os in September from 78% down to 66%, before reversing back up after Friday to its current position at 72%. The PTMID chart saw a similar movement, falling to 58% before reversing back up to 64% after trading Friday. While each of these charts remained above the 50% line of demarcation in their recent decline, their movement back into Xs indicates speaks to the technical strength of the market from a longer-term perspective for the large- and mid-cap focused indices.

In order to determine how the PTSPX level corresponds to the total return of the S&P 500 Index TR.SPXX, we split up the chart into quartiles and ran performance comparisons on how the broad market index does when the chart is in Xs. Reversals up in this territory have tended to work out well for domestic equity investors, as a hypothetical backtest of those that invested in the S&P 500 each time it was in Xs while between 50 and 75% produced an annualized total return of 10.19%, just below the overall market average of 10.64%. The best performing quaritle was, perhaps unsurprisingly, those time periods when the chart was in Xs above 75%, which produced an average annualized gain of 11.68%. This also accounted for above 46% of the days examined, which demonstrates that the PTSPX indicator has been in elevated territory almost have of the time it is in Xs.