Despite the recent correction, this summer—and even most of the year so far—has seen the common gauge for the broad market, the S&P 500, move sideways.
This lack of trend seems to have market participants getting a bit antsy, wondering when they will see a breakout that sticks in either direction. It also has market commentators digging a bit deeper into what is driving the market action. Market trend and breadth are seemingly becoming a more popular topic in the mainstream.
Lack Of Movement
The S&P 500 has been stuck in a sideways trend for a majority of the year. Since the end of February through Aug. 19, the S&P 500 has returned -0.22 percent on a total return basis. There are a few interesting notes on the move:
- The magnitude spent in positive and negative territory since February is very symmetrical. See the chart below, which is the total return line of the S&P 500, with the sum of the negative (red) and positive (green) areas notated.
Another example of the lack of trend is that the S&P 500 has crossed above/below its 50-day simple moving average 37 times this year. That is the highest number of crossovers in any year (and we are not even eight months in!)