This Historical Market Pattern Just Ended, and It Could Be a Precursor to a Market Crash

• The S&P 500 conscionable ended a historically agelong long of trading supra its 50-day moving average.

• The extremity of these agelong streaks has doubly been a precursor to a carnivore market.

• However, investors should not panic, alternatively sticking with dollar-cost averaging.

• 10 stocks we similar amended than S&P 500 Index ›

Given its volatility aboriginal successful 2025, the market's determination higher this twelvemonth has been amazingly creaseless until recently. In fact, it had been a historically creaseless pace. For 138 consecutive trading days, the S&P 500 (SNPINDEX: ^GSPC) had closed supra its 50-day moving mean until the streak ended connected Nov. 17.

This was the longest specified streak for the S&P 500 since a 149-trading-day play betwixt 2006 and 2007 that ended successful February 2007. It was besides its fifth-longest agelong since 1950.

The S&P 500 wasn't the lone large scale to commercialized supra its 50-day moving mean during this stretch. The Nasdaq Composite (NASDAQINDEX: ^IXIC) besides traded supra its 50-day moving mean implicit this period, with the dates overlapping with those of the S&P 500. Its streak was the longest since a 187-trading-day agelong that ended backmost successful October 1995.

The extremity of specified a streak tin beryllium a awesome of short-term weakness, though the much important awesome often is if the marketplace tin enactment supra its 200-day moving average. As of Nov. 24, the S&P 500's 200-day moving mean was 6,166.05, truthful the marketplace is inactive a bully 8% supra this mark. Meanwhile, astir 54% of stocks wrong the scale were besides supra their 200-day moving averages.

The extremity of the S&P's streak is not needfully a atrocious omen, arsenic the scale has typically seen affirmative returns some 3 and six months afterward erstwhile this has happened successful the past. On immoderate occasions, though, it has been a precursor to carnivore markets.

Back successful 2007, erstwhile the S&P 500 broke its 50-day moving mean streak, the marketplace saw a short-term dip, but aboriginal continued its upward inclination and deed a caller all-time precocious aboriginal that year. It ended up closing the twelvemonth with a 5.5% full return, including dividends.

However, October 2007 marked the commencement of a carnivore marketplace that lasted till aboriginal March 2009. During this period, the S&P 500 mislaid much than fractional its value. So the S&P 500 breaking its 50-day moving mean streak did not awesome an contiguous carnivore market, but it did foreshadow 1 astir 8 months later.

The extremity of different agelong streak backmost successful 1961 besides led to the commencement of a marketplace decline. The adjacent year, the marketplace saw a flash clang and fell into carnivore marketplace territory. These are the 2 premier examples of the S&P 500 falling beneath its 50-day moving mean that yet led to carnivore markets.