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Charts of Stock Market Strength

Stock market strength is the highest in at least the last 26 years and the charts below show why.

The daily SPY chart since inception of the ETF includes an indicator at the bottom that is the count of up gaps not filled intraday in a rolling 252-day period. By “up gaps not filled intraday” we mean daily bars with low of the day higher than the high of the previous day.

The value of the indicator as of the close of Friday, December 13, 2019, is at 34 and this is the highest value since the ETF inception. This indicator reflects the high strength of this bull market.

Price action after the bottom of the financial crisis in 2009 has caused the longer-term average of the indicator to increase to about 14 days and after 2013 (QE3+) the indicator has stayed above the average while it has recently rallied to new all-time highs along with prices.

This is an exceptionally strong bull market and shows potential of further gains but at the same time risks of a large correction have increased due to extreme conditions, as it is the case with the indicator of unfilled up gaps shown above.

The same pattern may be seen in QQQ ETF.

The count of unfilled up gaps as defined above is at 30 and this is also an all-time high due to a strong bull market in tech stocks.

The SPY chart with the indicator described above was included in our premium analysis for this week along with other interesting charts.


Charting and backtesting program: Amibroker

Data provider: Norgate Data

Technical and quantitative analysis of major stock indexes and 34 popular ETFs are included in our Weekly Premium Reports. Market signals for position traders are offered by our premium Market Signals service

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