An indicator that’s ‘90% accurate’ suggests hidden strength in the stock market

The U.S. stock market may feel particularly risky right now, as major indexes have been volatile throughout 2018 and there are a number of headwinds that investors are monitoring, but things may not be as bad as they seem.

There are multiple signs of equity strength going on below the surface of the major indexes, which could be a signal that the recent uptrend in stocks is justified and could continue.

One positive signal looks at the ratio of rising stocks on the New York Stock Exchange to the number of falling ones over time. Paul Schatz, the president of Heritage Capital, referred to this as “the one indicator that’s 90% accurate” for forecasting moves.

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