There's a simple indicator that explains why investors might feel like a new bull market in stocks has arrived, according to a Monday note fromThat indicator is the win ratio of stocks over a rolling 20-day period, which surged last week to its highest level since November 2021.
"The stock market is beginning to 'feel like a bull market' as the percentage of up days reached 65% last week. For the 15 month period from December 2021 to March 2023, this figure never exceeded 60% and was a crushing mere 20% on October 12, 2022," Lee said. In other words, stocks are moving higher more often than they're moving lower, and Lee thinks the trend will continue during"We believe [the indicator] will soon reach 70% in [the] coming weeks, aided by what we expect to be better than expected first quarter [earnings] results," Lee said.
While stocks have caught somewhat of a winning streak over the past month, it hasn't felt like that when looking at the past six months of market action. During that time, the win ratio between stocks moving higher or lower was just 46%, below the long-term average of 53%.
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Source: MarketWatch - 🏆 3. / 97 Read more »