Some numbers ...

I thought it might be nice for people to know that the S&P500 Cash Index has not touched its 200-day simple moving average for 296 days, as the chart below shows. The last time it touched was Nov 1, 2023, when it touched from the underside. The next day was up over the average, and there has not been a touch since. The brown curve below prices is the 200-day MA.

Now the uninitiated might think something like, "well shouldn't price touch the 200-MA every 100 days or so in order to average out to 200 days? And shouldn't it trade both above and below that average in order to produce an average?" Well, no, not necessarily so. Maybe it would touch more often if price generation was a more random process. But if there is a cause to the increase in prices - not random - this does not have to happen. That cause, is, by now, clear to most. Companies sell stocks to shareholders, and then they buy them back to show better profits. Company buy-backs have not stopped. They were last at an all-time high. (Read about the record at this LINK). They can continue to engineer their stock prices higher until they are faced with a bad earnings report, a change in leadership, or a significant increase in interest rates or other terms that affect their financing making the buy-back more of a poison-pill than a golden egg. Still, 296 days seems to be pushing it a bit.

Today the S&P500 cash index held within the tentative down parallel shown and came back at the end of the day to close on its 18-day SMA (another number worth noting). It could still go higher. There are ways to do it. But it is not required. So, now just another number for grins.

IF the market were to make a simple 1.618 downward extension - as shown in the chart - look how close it might come to that 200-day MA. That just seemed interesting.

Have an excellent rest of the evening,

TraderJoe