Global stock indices getting closer to all-time highs
U.S. stock market indices are among the first indices around the world to approach/exceed previous all-time highs. For example, the NASDAQ 100 and NASDAQ Composite have made new all-time highs, while the S&P and Dow are climbing rapidly. While many overseas indices are not yet near all-time highs, they are rallying along with U.S. equities.
This has caused the average developed market's distance from its 52 week high to rise rapidly.
*Developed markets include: Australia, Austria, Belgium, Canada, Finland, France, Germany, HK, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, UK, U.S.
When the average developed market index cycled from being more than -30% below its 52 week high to less than -13% below its 52 week high over the past 4 months, the MSCI World Index continued to rally over the next 3-6 months, even if global equities faced headwinds in the short term. This occurred after the first major rally of the 2002-2007 and 2009-2020 bull markets.
If we exclude Singapore, Italy and Norway (for where there is less historical data), we can stretch this study out to 1992:
Once again, a rebound in the average index's distance from its 52 week high has usually been a good sign for equities over the next 3-6 months, although it could lead to a short term pullback in global equities: