The Stock Market Is Flashing a Financial Crisis Signal – And It’s Insanely Bullish

  • The S&P 500 just recorded its second-best “month” ever, rising 22.3% in 20 trading days.
  • The only time it rose more aggressively was immediately after the stock market bottomed in 2009.
  • This historical indicator suggests the stock market is on the verge of a major rally.

The stock market has been flashing all kinds of ugly parallels to 2008 since the coronavirus pandemic sparked a historic sell-off two months ago. The S&P 500 just triggered another financial crisis echo, but this time, the indicator is ridiculously bullish for Wall Street.

S&P 500 Records Best ‘Month’ in 11 Years

As a new report from Strategas Research reveals, the S&P 500 just recorded its second-best 20-day run ever. The index surged 22.3% during that period, trailing only its 23.5% surge in late March and early April 2009.

The S&P 500 just recorded its second-strongest 20-day move in history. | Source: Yahoo Finance

Why is that significant? March 2009 is when the stock market finally bottomed following the crash that began in 2008.

That’s more than just an interesting factoid. It’s an insanely bullish indicator for a stock market that has been rocked by volatility amid an unprecedented economic crisis.

Why History Says This Is Bullish for the Stock Market

While Wall Street’s best days tend to occur during “bear market rallies,” the S&P 500’s best months have been a leading indicator of market upswings.

This chart shows what happened following the S&P 500’s strongest 20-day moves. (There are roughly 20 trading days in a month.)

The stock market has gained an average of 20.6% in the years following the S&P 500’s ten strongest 20-day moves. | Source: Strategas Research via the Bahnsen Group

David Bahnsen, managing partner of the Bahnsen Group, reflected on the data in a Wednesday evening note. He said that this confirms the wealth management firm’s view that near-term stock market volatility will eventually give way to long-term fundamental strength.

In market…

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