Late-session strength points to further gains

Key points:

• The last hour indicator rose for nine straight sessions
• Similar win streaks saw the S&P 500 rally 90% of the time over the next six months
• Technology displayed the most favorable outperformance trends

Sustained buying pressure in the last hour of trading 

The final hour of trading has shown consistent buying interest, with this critical period of the day displaying a gain for nine consecutive sessions -a streak not seen since April 2023, when equities were recovering from the 2022 bear market.

A measure of risk appetite, the last-hour indicator tends to spike like now when traders are concerned about bearing the risk of overnight upward drift in stocks.

Since 1992, win streaks lasting nine sessions or longer have occurred in fewer than 1% of trading sessions, underscoring rare and persistent late day buying pressure.

Buying pressure points to a sustainable uptrend

Whenever the last hour indicator rose for nine straight sessions, the S&P 500 displayed solid returns and consistency, suggesting the uptrend in stocks is likely to persist.  

Similar to now, three prior instances occurred with the S&P 500 closing at a high-in June 1995, February 1996, and June 2017-and in each case, the index was higher six months later.

Over the next year, the S&P 500 experienced a decline of more than 10% on three occasions. In contrast, it rose by more than 10% in 15 instances, indicating a favorable risk/reward profile.

The technology sector outperformed the broad market in 6 out of 7 horizons, suggesting investors should stick with this group as it continues to exhibit leadership status in the current uptrend.

What the research tells us...

After a brief dip near the end of August, buyers quickly stepped in, driving the S&P 500 to fresh record highs. The buying pressure was especially strong in the final hour of trading, helping fuel a rare nine-session winning streak during this critical period. Historically, comparable streaks have been followed by a bullish outcome, with the S&P 500 rising nearly 90% of the time over the next six months. Technology consistently emerged as the clear leader after such events, a pattern that aligns closely with today's relative strength trends.