• Consecutive Positive Months: The S&P 500 was in the green each calendar month for 13 months in a row; the last time this happened was in 1959 (that run extended for 15 months, as the chart bellow shows). While this is unusual, I am not quite sure exactly what it means.
• New Highs: Returns during that 13-month period were more than 27 percent. The average return during the five previous times where stocks had at least 10 consecutive monthly gains was 50 percent or more. Although stocks have gone up for a long while, they haven’t gone up that much. This is consistent with our earlier observation of a slow gradual grind higher.
• Moving Averages: The 200-day moving average has been rising every single day since May 2016. Momentum as the fourth Fama-French factor had a very good run last year. If you are looking for anything to make you bullish, it is this sustained trend.
Looking at all of these oddities combined, it suggests to me that investors remain flush with cash worldwide; that institutional investors believe stocks are their most attractive option for that cash. Last, that the secular bull market that began in 2013 (and not 2009) still has a way to run.
This column was provided by Bloomberg News.