S&P 500 · SPX · North America
The daily data-driven S&P 500 analysis: where the S&P 500 stands, how Trend, Breadth and Investor Sentiment define the current Market Regime, and how comparable setups have unfolded since 1985.
Risk-Off Phase Starts, Short-Term Score Diverges Sharply
The S&P 500 declined by 0.4% on Friday, closing at 7718.6 after opening at 7750.2 and trading within a narrow range. Market breadth was negative, with 66.5% of constituents declining and only 33.3% advancing, while just 1.2% of stocks reached new 52-week highs and an equal proportion hit new 52-week lows. Volume participation also skewed to the downside, as 59.1% of trading volume was in declining stocks.
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A compact analysis of the S&P 500 indicators: Trend, Trend Quality (Breadth), and Sentiment across the short- and mid-term horizon, including Smart Money and Dumb Money positioning.
Short-term TREND conditions deteriorated notably versus the previous observation, as several key indicators turned bearish. The Trend Trader Index Lines now show both envelope lines declining, signaling a breakdown in the short-term price structure. The Modified MACD confirms this shift, with short-term trend momentum turning negative. The Advance-/Decline 20 Days Momentum also turned bearish, reflecting negative breadth momentum among index constituents. The WSC Short-Term Trend Index, which measures the percentage of stocks trading above their 26-week highs, also turned bearish, further underscoring the loss of short-term price leadership. While the market remains above its 50-day moving average and the EMA 50 Line continues to rise, these positives are now outweighed by the breadth and momentum deterioration observed across multiple indicators.
TREND QUALITY weakened sharply, falling from a previously neutral stance to negative. The Trend Trader Index, which assesses the short-term price trend based on 20-day rolling highs and lows, shifted to neutral, reflecting a loss of directional conviction. Participation metrics such as the Percentage of Stocks Above 20-Day MA and Percentage of Stocks Above 50-Day MA both turned bearish, indicating that the majority of stocks are now trading below their respective short-term moving averages. The Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily both turned bearish, with declining stocks and volume outpacing advancing ones. New Highs vs. New Lows Daily also turned bearish, as more stocks are hitting new yearly lows than highs. These developments collectively point to a significant deterioration in the quality and breadth of the short-term uptrend.
SENTIMENT moderated from a previously positive reading to neutral. The Upside-/Downside Volume Index Daily remains supportive, with volume flows into equities still positive, but this is now counterbalanced by negative signals from breadth and momentum indicators. The CBOE Total Put-/Call Ratio Daily, Realized Volatility (10d), and 9-to-1 Up-/Down Days all remained neutral, providing little directional insight. Measures of extreme short-term overbought or oversold conditions, such as the Percentage of Stocks with RSI(14) above 70 or below 30, also remained neutral. Overall, the short-term SENTIMENT backdrop is now more cautious, reflecting a market that has lost its prior bullish conviction.
Mid-term TREND conditions remain robust, holding at their maximum reading. The WSC Trend Index continues to indicate broad-based strength, with a high percentage of stocks trading above their 52-week highs. The WSC Mid-Term Price Trend remains bullish, and the market closed above its 100-day moving average, with the EMA 100 Line still rising. Participation metrics such as the Percentage of Stocks Above 100-Day MA and 150-Day MA both confirm that the majority of index constituents are in supportive territory. The Advance-/Decline Index Weekly and Upside-/Downside Volume Index Weekly both remain constructive, with advancing issues and volume outpacing decliners. However, the Modified McClellan Oscillator Weekly turned bearish, signaling some loss of momentum among advancing stocks, though this has not yet undermined the overall mid-term TREND.
TREND QUALITY in the mid-term eased slightly, retreating from its prior peak but remaining firmly positive. The underlying price structure is still supported by a majority of stocks trading above their 100- and 150-day moving averages, and the market’s position above the 100-day EMA reinforces the constructive backdrop. The Advance-/Decline Index Weekly and Upside-/Downside Volume Index Weekly both continue to show healthy participation and demand. However, the Modified McClellan Oscillator Weekly’s bearish turn introduces a note of caution, suggesting that while the uptrend remains intact, the quality of participation is not as broad-based as previously observed. This moderation in TREND QUALITY warrants close monitoring for any further signs of breadth deterioration.
SENTIMENT in the mid-term remains positive, with several indicators reinforcing a constructive outlook. Realized Volatility (20d) is trading below its 25th percentile, which is typically a supportive signal for risk assets. The WSC Capitulation Index continues to show positive momentum in smart money flows, and the AAII Bulls & Bears Survey turned bullish, indicating strong investor optimism. However, the Smart Money Flow Index is not confirming the current market level, and the WSC Capitulation Index FT remains negative, suggesting some divergence in smart money behavior. Other sentiment measures, such as the Z-Score Put-/Call Ratio and the Hindenburg Omen, remain neutral and do not materially influence the overall assessment. The net effect is a positive but slightly less exuberant SENTIMENT backdrop compared to the previous observation.
The S&P 500 remains positioned within a Structural Bull Market, as defined by persistently strong Long-Term Market Health. Despite this constructive long-term backdrop, the current regime has shifted to Increasing Risk, reflecting a pronounced divergence between weak Short-Term Market Health and robust Mid-Term Market Health. This regime marks a transition from the prior Risk-On phase to a Risk-Off stance, with near-term conditions deteriorating even as the broader structural environment remains supportive.
Historically, since 1985, this regime has delivered an annualized return of -16.7% with a Sharpe of -1.05, against a buy-and-hold baseline of +12.4% per year. Volatility has been broadly similar to buy-and-hold, while the average maximum drawdown stands at -0.9%. The up-day rate is 49.7%, based on a sample of 389 episodes.
Historical return of the S&P 500 je Marktphase: die Entwicklung der sechs Market Regimes seit 1985 im Vergleich zur Buy-and-Hold-Benchmark. Die aktuelle Marktphase ist als Aktiv gekennzeichnet.
Increasing Risk| Market Regime | Zeitanteil | Episoden | Rendite p.a. | Positive Tage | Ø positiver Tag | Ø negativer Tag | Volatilität | Sharpe |
|---|---|---|---|---|---|---|---|---|
| Risk-On · 70.8% der Zeit | ||||||||
| Very High Reward | 62.9% | 393 | 26.9% | 56.3% | 0.6% | -0.5% | 11.5% | 2.33 |
| High Reward | 4.0% | 135 | 35.7% | 55.0% | 0.8% | -0.7% | 16.5% | 2.17 |
| Increasing Reward | 3.9% | 98 | 38.6% | 55.7% | 1.1% | -1.1% | 22.9% | 1.69 |
| Risk-Off · 29.2% der Zeit | ||||||||
| Increasing Risk | 14.8% | 389 | -16.7% | 49.6% | 0.7% | -0.8% | 15.9% | -1.05 |
| High Risk | 4.5% | 193 | -15.9% | 48.1% | 0.8% | -0.8% | 17.0% | -0.93 |
| Very High Risk | 9.9% | 157 | -32.1% | 48.4% | 1.5% | -1.6% | 37.9% | -0.85 |
| Benchmark · Buy & Hold | ||||||||
| All Periods | 100.0% | n/a | 12.4% | 54.4% | 0.7% | -0.7% | 17.3% | 0.72 |
Returns annualized; up-day share, average daily returns, volatility and Sharpe Ratio based on historical daily data since 1985. Past performance is no guide to future results.
Short-Term and Mid-Term Market Health scores indicate a near-term outlook that is mixed but cautious. Historically, comparable phases have produced a balance of positive and negative outcomes in the immediate term, with a tendency for muted or inconsistent returns over the next several weeks. The deterioration in Short-Term Market Health suggests that the probability of sustained upside is limited in the near horizon, and the regime has not favored persistent positive momentum at this stage.
The current combination of Short-Term and Mid-Term Market Health situates the regime as very stable, with a 91.3% probability of remaining in Risk-Off territory over the next five trading days (Increasing Risk 89.1%, High Risk 2.2%).
The historical pattern in similar Increasing Risk, Risk-Off regimes has favored reducing exposure or adopting a more defensive posture until clearer signs of stabilization emerge. The bias has leaned toward limiting risk and avoiding aggressive positioning changes while the short-term picture remains fragile.
WallStreetCourier publishes end-of-day research on the S&P 500 every trading day. With a free Basic account you get full access to one market every week: Daily Morning Briefing, Market Regime Research, Market Health and the complete Indicator Dashboard.
See This Week's Free Market →The current classification is shown at the top of this page and is updated after the close on every trading day. It is based on the S&P 500 Market Regime, the market phase derived from trend, market breadth and investor sentiment. Instead of price targets, the analysis shows how the S&P 500 has performed in comparable conditions since 1985. The freely available report is published with a delay; members receive it on the day of publication.
The answer is provided by the six-level scale at the top of this page. The upper three levels (Risk-On) indicate a constructive, broadly bullish environment, the lower three (Risk-Off) a defensive, broadly bearish environment. In addition, the long-term Market Health Score, a measure of market health from 0 to 100, shows whether the S&P 500 is trading in a bull or bear market on a structural level: readings of 50 and above indicate a bull market, readings below 50 a bear market.
Chapter 01 covers the latest session and which indicators changed. Structurally, a single down day rarely changes the underlying picture: the Market Regime is derived from trend, breadth and sentiment across more than 40 indicators, not from one session. The page shows whether the latest move has shifted the regime or left it intact.
Nobody can predict that with certainty. Instead, Chapter 04 shows the probability that the current market phase of the S&P 500 has persisted or shifted in comparable historical conditions since 1985. This provides a statistical expectation for the coming trading days, not price targets.
The long-term outlook is derived from the structural market status and historical statistics: Chapter 04 shows how often the S&P 500 was trading higher twelve months after comparable market phases and what the average development looked like. This is a probability-based assessment built on data since 1985, not a prediction.
Indications are provided by the sentiment indicators in Chapter 02, including the positioning of Smart Money and Dumb Money, meaning institutional and retail investors. Extreme euphoria has historically served as a warning signal, while extreme fear often acts as a contrarian indicator. The current state of investor sentiment is published on every trading day.
No. Classic forecasts provide price targets and chart levels. Instead, this page determines the current market phase of the S&P 500 on every trading day based on trend, market breadth and investor sentiment, and shows how comparable phases have developed since 1985. Probabilities instead of price targets: that is the data-driven form of an outlook.
In part. The indicators behind the Market Regime are technical: trend direction, moving averages, momentum and market breadth, combined with investor sentiment and smart money positioning. The difference lies in the interpretation. Instead of reading chart patterns, the signals are aggregated into a single score and compared with the historical record.
A Market Regime describes where a market stands as of the latest close on a six-level scale, from Very High Reward to Very High Risk. The upper three levels are considered Risk-On, the lower three Risk-Off. The classification describes the risk-reward environment the S&P 500 is trading in, not a price target.
Market Health is a measure of the market's condition: a composite score from 0 to 100, calculated separately for the short-, medium- and long-term horizon. It combines three dimensions: Trend shows whether the market is moving up, down or sideways. Market breadth (Trend Quality) measures how many stocks are actually participating in the move. Sentiment captures investor mood, including the positioning of Smart Money and Dumb Money. Readings above 50 indicate a constructive environment.
Risk-On comprises the three constructive Market Regimes Very High Reward, High Reward and Increasing Reward. Risk-Off comprises Increasing Risk, High Risk and Very High Risk. This distinction matters because the six Market Regimes have developed very differently since 1985. The table above shows, for each Market Regime since 1985, the annualized return, the share of positive days, the volatility and the Sharpe Ratio compared to the buy-and-hold benchmark.
After the close on every trading day. WallStreetCourier publishes end-of-day research only. Intraday or live data is not offered.
A free Basic account provides full access to one market every week: Daily Morning Briefing, Market Regime Research, Market Health and the complete Indicator Dashboard. The freely available market changes every Saturday. No credit card is required.
No. WallStreetCourier publishes quantitative market research for informational purposes. It describes current market conditions but does not provide recommendations to act. The historical performance of a Market Regime is not a reliable indicator of future results.
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