How Old Is this Bull Run Getting? Check MA Test Bars Since

2022년 1월 7일

There are many price-based techniques for anticipating the end of a move. However, the simple passage of time can also help because bull markets don’t last forever. While old age doesn’t necessarily cause investors to sell, a reversal becomes more likely the longer a trend lasts.

So, how long have prices been going up? There are various ways to measure that. Our earlier script, MA streak, offered one solution by counting the number of bars that a given moving average has been rising or falling.

Today’s script takes a different approach by counting the number of candles since price touched or crossed a given moving average. It tracks the 50-day simple moving average (SMA) by default. It can be adjusted to other types like exponential and weighted with the AvgType input.

In the chart above, Bars Since MA Test was adjusted to use the 200-day SMA. Viewing the S&P 500 with this study helps put the current market into context.

We can see that prices last touched the 200-day SMA 386 sessions ago (June 29, 2020). That’s relatively long based on history, but not unprecedented. For example, the indicator was at 407 in February 2018 as the market pulled back. It also hit 475 in October 2014 (following the breakout above 2007 highs).

Additionally, the S&P 500 is nearing the record of the 1990s bull market (393 candles on July 12, 1996).

Before that, you have to look all the way back to the 1950s, when it twice peaked at 627.

The conclusion? The current run without a test of the 200-day SMA is above average, but not yet record-setting. It may be interesting to watch as earnings season approaches and the Federal Reserve looks to tighten monetary policy.

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