Trend Signal Now: The Bull Is Back

Wednesday, May 14, 2025

The market is firing on all cylinders.

Investors are embracing an increasing level of risk and leaning into global opportunities.

But the animal spirits are back in US markets too.

Speculative tech is back on trend, risk appetite is improving with every passing day, and market internals are confirming all this bullish action in a big way.

Another critical breadth thrust printed this week, with the percentage of stocks making new 20-day highs breaching 55% for the first time in almost 18 months.

Grant just wrote about it and called it his "favorite breadth thrust."

If I had to pick just one, it would be my favorite, too.

But what I really like is when our suite of breadth thrusts all fire together. And this is starting to happen now.

We got the ultra short-term thrusts already. Now we're getting the short and intermediate-term thrusts. And I'm sure we'll get the longer-term ones soon.

This signal has a perfect track record over the last 25 years based on forward 12-month returns. The average return is 15% after the thrust. We got big signals off the 2018, 2020, and 2022 lows. And now again today.

Check out Grant's note below. It has all the charts and statistics. And if you're not getting his free daily email, sign up for it here. Grant is the best in the business when it comes to stat work.

The bull is back.

Steve

Today's number is... 58%

58% of S&P 500 stocks made 20-day new highs yesterday.

Here's the chart:

Let's break down what the chart shows:

The blue line in the top panel is the S&P 500 index price.
The black line in the bottom panel shows the percentage of S&P 500 stocks at 20-day highs.
The red line in the bottom panel is the trigger for a breadth thrust.
The gray shading highlights when in a breadth thrust regime.

The Takeaway: Market participation is heating up!

Yesterday, my favorite breadth thrust officially fired.

The breadth thrust I am talking about is when 55% or more of the S&P 500 stocks reach a 20-day new high.

Yesterday, we saw 58% of S&P 500 stocks making 20-day new highs,

This means we have entered a breadth thrust regime that lasts one year.

It's not an all-clear signal or a guarantee that the market will go up, but this breadth thrust regime points to healthy market leadership conditions and indicates that the stock market may more easily move up and to the right.

The past performance of this breadth thrust is impressive.

See the table above for the stats!

100% of the time, a year later, the markets are on average up over 15%.

So…

Are you leaning in here?

Or staying cautious?

What are your thoughts?

Let me know!

P.S. Jeff Macke went live today to preview "the most important" earnings report of 2025.

Steve Strazza | Chief Market Strategist, All Star Charts

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