'Extreme Buying' Sends Over 60% Of S&P 500 Stocks To 20-Day Highs

The U.S. stock market has seen an increase in buying activity recently. From positive macroeconomic events to earnings surprises, investor sentiment has been faring better than earlier in the year. And, November was a particularly good month for the U.S. stock market.

S&P 500 Up 9% Since Oct. 31

Exchange-traded funds that closely track the S&P 500 index, namely the SPDR S&P 500 ETF Trust SPY, the iShares Core S&P 500 ETF IVV and the Vanguard 500 Index Fund ETF VOO are up over 9% since Oct. 31.

Leveraged ETFs have multiplied gains for investors. The Direxion Daily S&P 500 Bull 3X Shares SPXL and the ProShares UltraPro S&P 500 UPRO delivered close to 28%% in price returns since Oct. 31.

The benchmark rallied 8.9% in November alone, recording the second biggest November gain since 1980. Macro tailwinds such as declining bond yields and expectations of monetary policy easing by the Fed have been helping with investor sentiment about the stock market overall.

Solid earnings beat added to it: 82% of S&P 500 companies reported a positive EPS surprise and 62% of S&P 500 companies reported a positive revenue surprise. For third-quarter 2023, the blended Y/Y earnings growth rate for the S&P 500 is 4.8%, according to FactSet.

Related: S&P 500 Recorded Its 2nd Best November Since 1980: Strategists See Bullish 6 Months Ahead

Another ‘Extreme Buying’ Event Adds To Positive 2024 Expectations

Per Carson Investment Research, as reported by Ryan Detrick, an event was recorded every time more than 60% of the components in the S&P 500 hit a 20-day high — “extreme buying” events. Accordingly, every time an event was recorded, the S&P closed higher, a year later. This time, for the 15th time. The S&P 500 has averaged an 18% 12-month return over the past 15 such events.

All this market frenzy soaked in optimism is adding to a growing list of reasons to expect a strong 2024.

Read Next: Where Is S&P 500 Headed In 2024?

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