Study: Nasdaq Leading The S&P Is A Bullish Sign

The Nasdaq and S&P are both up this year from January – May. However, the Nasdaq has massively outperformed the S&P by more than 6%.

Here are all the historical cases in which the Nasdaq outperformed the S&P by more than 6% from January-May (while both indexes are positive), and what happens next to the S&P for the rest of the year.

 

Click here to download the data in Excel.

Here are the historical cases in detail.

2017

The S&P trended higher throughout the rest of the year.

 

2009

The S&P trended higher throughout the rest of the year.

 

2003

 

1999

The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

 

1996

The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

 

1991

The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

 

1983

The S&P trended sideways throughout the rest of the year.

 

1979

The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

 

1978

The S&P trended sideways throughout the rest of the year.

 

1972

The S&P trended higher throughout the rest of the year, although it did so in a choppy manner.

 

Conclusion

This is a medium term bullish sign for the stock market. It suggests that the stock market will trend higher throughout the rest of the year, even though it may do so in a choppy manner.

There was only 1 loss at year end out of the 10 historical cases. This was a tiny loss: -1.16%