“Do something you love and you’ve never worked a day in your life.” Tony Bennett
The bull market is back, with stocks back at new highs amid one of the strongest short-term rallies in history. Although many lost faith in the bull market back in March, we’d argue the bull never left. Remember, volatility is the toll we pay to invest, and scary headlines and bad days are all part of longer-term investing.
The S&P 500 gained more than 3% for the third consecutive week last week, something that has only happened two other times in history. Those times were off the 1982 lows and after the Covid lows. The S&P 500 was up more than 30% a year later, those two times. We aren’t saying that’ll happen again, but we are saying the blast of strength we’ve seen the past few weeks is a clue the lows are in and the bulls are back in charge. One more fun one—this is the first time in history the S&P 500 was up 3% three consecutive weeks, but each week gained more than the previous week.
Three Incredible Rally Stats
The S&P 500 was recently up 9.8% in 10 days, for one of the greatest 10-day rallies in history. Some think large moves like this are bearish, but they actually tend to suggest higher prices ahead.
Looking at the best 20 10-day rallies ever, the S&P 500 was higher a year later nearly 85% of the time, with the early 2000s tech bubble the only times it was down. Bottom line, this type of extreme buying is a hallmark of major lows and higher future prices.
The S&P 500 also went from oversold to overbought in record time. We will get a tad geeky here, but to measure overbought and oversold, we use an indicator called the 14-day relative strength index (“RSI”). We will keep this very simple, but this is a popular momentum oscillator. The RSI ranges from 0 to 100. When the reading comes in under 30, things are oversold, and when it comes in above 70, things are overbought. Well, the S&P 500 moved from oversold to overbought in an incredible 11 days, the second fastest ever! Only the move off the 1982 lows was faster. Looking at the 10 prior fastest moves from oversold to overbought, the index was up six months later nine times, with some very impressive gains.
Lastly, technology stocks have been on fire, with the technology-heavy large-cap Nasdaq-100 index up an incredible 13 days in a row (ending with yesterday’s loss), one of the longest streaks ever and the longest win streak since 2013.
We found seven other times the Nasdaq-100 was up at least 12 days in a row, and the index was higher a year later every single time, and up more than 19% on average. Some potentially near-term choppy action would be perfectly normal, but in the bigger picture, this is another clue the bull market is back.
More Clues the Bull Is Back
Thursday and Friday have been quite weak days this year, as sellers would rather get out ahead of trouble over the weekend. Well, last week both Thursday and Friday were higher, something we hadn’t seen for nearly three full months. To me, this is another subtle clue that the bulls are back. Below you can see how each day of the week has done so far in 2026. If we see more strength later in the week, that’ll be a very positive development.
Another positive development is that the S&P 500’s advance/decline line moved to a new all-time high last week. Market breadth leads price, and to see this is another clue we have a healthy and broad-based bull market on our hands. Notice in late March, the A/D line didn’t make new lows even though the price did. That was a real-time clue that a potential rally was near, and boy, did that play out.
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Two More
Here’s a tweet I sent out with some interesting info. When a year has a 7-day win streak, the full year is up 19 out of 20 times, and when the S&P makes a new high in April, the full year is higher 18 out of 19 times. The full-year return under both instances is a very impressive 18.8%.
Putting It in Perspective
With new highs in place, the bull market has now made it to 3.5 years old. We’ve noted many times that once a bull market gets this old it is perfectly normal to last many more years. In fact, the five bull markets that made it this far the past 50 years lasted an average of eight years, with the shortest being five years.
Did you know this current bull market is up 99.2%? As of Friday’s recent all-time high, it was just a good day away from being up more than 100% off the lows. How much further it could go is anyone’s guess, but we have said for years this bull market is alive and well, and we aren’t changing our tune just yet. I was working on some studies about how much longer a bull can last once it doubles, but I’ll save that for another day, plus I don’t want to jinx it!
Thanks as always for reading what our team has to say. It has been a volatile year for sure, but we still see more positives than negatives out there. Lastly, I’m excited to announce that I am officially a CNBC Contributor! I’ve been a fan of CNBC for 27 years and to be part of the team is a dream come true. In fact, bright and early this morning I was on Morning Call and my friend Dominic Chu introduced me as a Contributor, as you can watch below. Go read the quote at the top one more time by Tony Bennett, that’s how I truly feel.
For more content by Ryan Detrick, Chief Market Strategist, click here.
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