The rally in U.S. stocks has driven the distance between the Standard & Poor’s 500 Index and its 200-day average toward peak levels that have coincided with the start of the biggest annual retreats in the last three years.
U.S. stocks’ gain last week wasn’t enough to spell the end of a retreat that sent the Standard & Poor’s 500 Index to the biggest decline since the bull market began, according to Katie Stockton of MKM Partners.
The Standard & Poor’s 500 Index is likely to retreat to its 20-day moving average, a level about 1.7 percent below its current price, before rebounding to a new high for the year, said Katie Stockton, chief market technician at MKM Partners LLC.
Retailers are poised to rally on after setting a new high relative to the Standard & Poor’s 500 Index and a trending measure showed a pick-up in the stocks’ momentum, according to analyst Katie Stockton of MKM Partners.
Individual investors and newsletter writers are the most bearish on U.S. stocks since at least August, a sign the six-week slump may be nearing an end, according to analysts who use charts to predict markets.