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.
Very High Reward Regime Persists, Risk-On Run Far Exceeds Norms
The S&P 500 advanced 0.7% on Friday, closing at 7489.7 after trading between 7399.8 and 7512.0. Despite the positive price return, only 43.1% of constituents advanced while 56.7% declined, and just 0.8% reached new 52-week highs. Volume participation was mixed, with 52.4% of trading volume in advancing stocks and 47.5% in decliners, indicating that the index’s gain occurred alongside limited internal participation.
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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 indicators moderated versus the previous observation, with the Trend Trader Index Lines now showing both envelope lines declining, which marks a deterioration in the structural backdrop and a shift to a more cautious stance. The Modified MACD also turned bearish, reflecting negative momentum in the short-term price trend. However, the Advance-/Decline 20 Days Momentum remains constructive, indicating that advancing issues continue to outpace decliners over the past month. The WSC Short-Term Trend Index continues to signal broad-based strength, as a significant proportion of stocks remain above their 26-week highs. The market also closed above its 50-day moving average, and the EMA 50 Line is still rising, both of which are supportive for the short-term TREND.
TREND QUALITY in the short-term held steady, with the overall structure remaining positive but showing some signs of fatigue. The Trend Trader Index, which had previously been supportive, shifted to neutral, reflecting a loss of directional conviction. Participation metrics such as the Percentage of Stocks Above 20-Day and 50-Day Moving Averages remain robust, with the majority of constituents trading above these key levels, underscoring the breadth of the recent advance. The Upside-/Downside Volume Index Daily turned bullish, indicating renewed positive volume flows, while the New Highs vs. New Lows Daily continues to show more stocks reaching new highs than lows. However, the Modified McClellan Oscillator Daily and Modified McClellan Volume Oscillator Daily both turned bearish, highlighting a deterioration in underlying momentum. Overall, while the short-term TREND QUALITY remains positive, the balance of evidence suggests a more mixed environment than previously observed.
Short-term SENTIMENT remains negative, with little change from the prior observation. Realized Volatility in % (10d) continues to trade above its 75th percentile, signaling elevated risk and a less favorable backdrop for risk-taking. The CBOE Total Put-/Call Ratio Daily remains neutral, offering no clear directional bias from options flows. Other sentiment gauges, such as the 9-to-1 Up-/Down Days and the Percentage of Stocks with RSI(14) above 70 or below 30, also remain neutral, indicating a lack of extreme positioning or overbought/oversold conditions. The absence of a positive shift in SENTIMENT suggests that, despite some constructive price action, investor psychology remains cautious in the short-term.
Mid-term TREND indicators remain firmly positive, with the WSC Trend Index continuing to show a broad-based advance as a high percentage of stocks trade 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 remains strong, as the majority of stocks are above both their 100-day and 150-day moving averages, confirming the underlying strength of the mid-term price trend. The Advance-/Decline Index Weekly also reflects a constructive tape, with advancing issues outpacing decliners. Despite these positives, the Modified McClellan Oscillator Weekly and Upside-/Downside Volume Index Weekly both turned bearish, indicating that momentum and volume flows are beginning to show signs of strain. Nevertheless, the overall mid-term TREND remains robust.
TREND QUALITY in the mid-term retreated from its previous level, reflecting a moderation in the strength of the underlying advance. While the majority of stocks continue to participate in the uptrend, as evidenced by the Percentage of Stocks Above 100-Day and 150-Day Moving Averages, the shift to bearish signals in the Upside-/Downside Volume Index Weekly and the Modified McClellan Oscillator Weekly highlights a weakening in demand and momentum. The Advance-/Decline Index Weekly remains supportive, but the loss of positive volume and momentum signals suggests that the quality of the mid-term TREND is less convincing than in the prior observation. The WSC Capitulation Index remains positive, indicating ongoing smart money support, but the Smart Money Flow Index and WSC Capitulation Index FT both point to a lack of confirmation from institutional flows. Overall, TREND QUALITY remains positive but has softened, warranting closer monitoring.
Mid-term SENTIMENT remains negative, with the score declining further from the previous observation. The Smart Money Flow Index continues to show a lack of confirmation for current market levels, and the WSC Capitulation Index FT maintains a negative outlook, suggesting that institutional investors are not fully endorsing the rally. The AAII Bulls & Bears Survey reflects increased fear among individual investors, with a rising number of bears. Other sentiment measures, such as the Z-Score Put-/Call Ratio and Realized Volatility in % (20d), remain neutral, indicating no extreme positioning or volatility shocks at this horizon. The Hindenburg Omen also remains neutral, suggesting no immediate breadth-driven risk. Overall, the mid-term SENTIMENT backdrop is cautious, with persistent skepticism from both institutional and retail participants.
The S&P 500 remains positioned within a Structural Bull Market, as defined by persistently elevated Long-Term Market Health. The current regime reflects the most constructive of the six tiers, with both Short-Term and Mid-Term Market Health holding at constructive levels. This environment continues to support a Risk-On stance, with the market sustaining a Very High Reward phase since mid-May.
Historically, since 1985 and across 391 samples, this regime has delivered an annualized return of +26.9% with a Sharpe ratio of 2.33, roughly twice the buy-and-hold baseline of +12.3%, at meaningfully lower volatility. The average maximum drawdown stands at -1.4%, and the up-day rate is 56.3%.
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.
Very High Reward| Market Regime | Zeitanteil | Episoden | Rendite p.a. | Positive Tage | Ø positiver Tag | Ø negativer Tag | Volatilität | Sharpe |
|---|---|---|---|---|---|---|---|---|
| Risk-On · 70.6% der Zeit | ||||||||
| Very High Reward | 62.7% | 391 | 26.9% | 56.3% | 0.6% | -0.5% | 11.5% | 2.33 |
| High Reward | 4.0% | 133 | 43.6% | 56.2% | 0.8% | -0.6% | 16.3% | 2.67 |
| Increasing Reward | 3.9% | 98 | 39.2% | 55.9% | 1.1% | -1.1% | 22.9% | 1.71 |
| Risk-Off · 29.4% der Zeit | ||||||||
| Increasing Risk | 14.9% | 387 | -16.4% | 49.7% | 0.7% | -0.8% | 15.9% | -1.03 |
| High Risk | 4.7% | 196 | -17.1% | 47.7% | 0.8% | -0.8% | 17.1% | -1.00 |
| Very High Risk | 9.8% | 159 | -34.0% | 48.0% | 1.5% | -1.7% | 38.2% | -0.89 |
| Benchmark · Buy & Hold | ||||||||
| All Periods | 100.0% | n/a | 12.3% | 54.4% | 0.7% | -0.7% | 17.3% | 0.71 |
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 outcomes have historically been mixed under these conditions, with positive and negative moves occurring at similar rates over the next day to one month. The current Short-Term and Mid-Term Market Health scores suggest that, while the broader regime is highly constructive, near-term returns have not consistently skewed positive in comparable episodes. The short-term outlook is therefore neutral, with no clear historical tendency toward either sustained gains or losses over the coming weeks.
The current combination of Short-Term and Mid-Term Market Health situates the regime in a stable state, with an 84.4% probability of remaining in Risk-On territory over the next five trading days (Very High Reward 84.4%).
The historical pattern in this regime has favored maintaining exposure rather than making aggressive allocation changes. Participation has generally been rewarded over time, but the absence of a strong short-term directional bias suggests a measured approach. The bias has leaned toward ongoing participation in line with the prevailing Risk-On regime.
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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