Market Breadth Study – $MA200SP500 Signal Performance
Market breadth is one of the most overlooked but powerful tools for understanding the health of the S&P 500. One of the most reliable indicators I track is $MA200SP500, which measures the percentage of S&P 500 stocks trading above their 200-day moving average.
Extreme readings are rare — and when they occur, they often signal capitulation, forced selling, and deeply oversold internal conditions that historically precede major market rebounds
To test this, I pulled every weekly instance since 2020 when:
$MA200SP500 ≤ 0.25
(meaning 25% or fewer S&P 500 stocks are above their 200-day average)
These moments represent true “washout” conditions, and historically, they’ve marked some of the best medium-term buying opportunities in the past five years.
What the $MA200SP500 Indicator Tells Us About the S&P 500
The indicator triggered a signal whenever:
$MA200SP500 ≤ 0.25
(meaning 25% or fewer S&P 500 stocks were above their 200-day moving average)
These events represent true washout conditions.
Below are every signal since 2020 — and how SPY performed afterward.
📌 The Signals: Every Time Breadth Hit ≤ 0.25
| Date | $MA200SP500 | SPY Price | 3-Month Return | 6-Month Return | 12-Month Return |
|---|---|---|---|---|---|
| 23 Oct 2023 | 0.248 | $410.74 | +18.5% | +24.0% | +35.4% |
| 17 Oct 2022 | 0.232 | $374.25 | +4.0% | +18.9% | +17.9% |
| 10 Oct 2022 | 0.154 | $357.77 | +9.9% | +31.5% | +25.9% |
| 03 Oct 2022 | 0.170 | $362.75 | +7.0% | +29.7% | +20.6% |
| 26 Sep 2022 | 0.116 | $357.17 | +8.8% | +31.4% | +24.2% |
| 19 Sep 2022 | 0.140 | $368.11 | +6.7% | +25.1% | +21.0% |
| 18 Jul 2022 | 0.196 | $395.07 | -2.9% | +14.8% | +6.3% |
| 11 Jul 2022 | 0.174 | $384.96 | +2.2% | +22.1% | +15.8% |
| 20 Jun 2022 | 0.216 | $389.94 | -6.1% | +4.8% | +3.9% |
| 16 May 2022 | 0.248 | $389.73 | +5.5% | +18.0% | +9.2% |
| 31 Mar 2025 | 0.208 | $505.54 | +23.6% | — | — |
| 23 Mar 2020 | 0.076 | $254.00 | +45.6% | +31.1% | +47.1% |
| 16 Mar 2020 | 0.034 | $229.40 | +55.3% | +34.5% | +58.9% |
📊 Performance Summary
Short-Term: 3 Months
- Median Return: +8.8%
- Positive Outcomes: 91% (10 out of 11)
Even in volatile bear markets, forward 3-month returns were overwhelmingly positive. The only weak readings occurred during mid-2022 when the Fed was deep in tightening mode.
Medium-Term: 6 Months
- Median Return: +25.1%
- Positive Outcomes: 100% (10 out of 10 signals)
This is where the signal shines.
Every single instance produced solid medium-term gains — often explosive, as seen in:
- Mar 2020: +31.1%
- Oct 2022 cluster: +25–31%
- Oct 2023: +24.0%
This showcases how deeply washed-out breadth conditions precede sustained recoveries.
Long-Term: 12 Months
- Median Return: +21.0%
- Positive Outcomes: 100% (10/10 signals)
Not one instance produced a negative 12-month return.
The combination of forced selling + capitulation + breadth reset sets the stage for durable rallies.
🔥 Key Insight
When fewer than 25% of S&P 500 stocks are above their 200-day MA on a weekly close, the market is not just “oversold” — it’s historically near exhaustion, often marking the end of broad downside momentum.
The signal captures periods where:
- Institutional selling is nearly complete
- Correlations spike
- Retail capitulates
- Hedge funds de-gross
- Breadth thrust potential becomes high
Essentially:
When everything is breaking, the market is quietly building energy for the next uptrend.
📍 The Most Recent Signal: March 31, 2025
- $MA200SP500 = 0.208
- SPY = $505.54
- 3-month return = +23.6%
Historical context says:
This rally is not unusual — it’s exactly what the model predicted.
📈 Conclusion: A High-Conviction Breadth Signal
Across all signals since 2020:
- 91% positive after 3 months
- 100% positive after 6 months
- 100% positive after 12 months
- Median 6-month return: +25%
- Median 12-month return: +21%
This is one of the strongest probability edges in modern market breadth analysis.
If history rhymes, the March 2025 signal could still have room to run.
How to invest when market reaches these signals? Read our take on long-term investing
Learn how we add market breadth using TrendSpider Charts
