It took nearly seven months, but the S&P 500 Index finally closed at a new all-time high this past week. Many clues along the way suggested new highs could eventually come, like strong overall market breadth and excellent earnings growth. Still, the big question now is, what happens next?
LPL's Senior Market Strategist, Ryan Detrick, explains, "Investors have been patiently waiting for new highs in the S&P 500, even while small caps and technology have been making new highs for months now. Here's the good news: When the S&P 500 has gone at least six months without a new high, the index has been higher a year after the next new high in 17 out of the past 18 instances, going back to 1950."
The chart below shows how long waits between new highs tend to foreshadow strong outperformance in the subsequent year.
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