Market Normality Indicator
Most market commentary is reactive: it tells you whether the day was good or bad. This indicator answers a more useful question. Where does today's market sit in the full historical distribution? Four gauges, four angles, one calming message: most of what feels alarming is well within the range of normal.
Market Normality Indicator
Data as of Aug 21, 2026Four ways of asking the same question: where does today's market sit in the historical distribution? Each gauge places the current value on the empirical frequency curve and reports what has typically come next from this zone.
Currently in Calm. This zone covers about 60% of historical days. From here, the next 12 months have averaged +12.4% and were positive 83% of the time.
Currently in Above. This zone covers about 30% of historical days. From here, the next 12 months have averaged +12.6% and were positive 85% of the time.
Currently in Strong. This zone covers about 20% of historical days. From here, the next 12 months have averaged +16.0% and were positive 91% of the time.
Currently in Strong. This zone covers about 20% of historical days. From here, the next 12 months have averaged +15.1% and were positive 90% of the time.
Up 21.9% over 12 months is the meat of normal. Nothing to do.
Currently in the Strong zone of this metric, which covers about 20% of all historical days. From this zone, the next 12 months have averaged +16.0%, with the market positive 91% of the time. Three years out, the average gain is +41.9%, positive 84% of the time. Most recent comparable level: April 21, 2026.
Computed from 19,206 days of S&P 500 price (since 1950) and 9,228 days of total return data (since 1989). For educational purposes only. Not investment advice.
Is the advance broad, or carried by a few names?
The advance-decline line is a running tally of how many NYSE stocks rise versus fall each day. It ignores how far prices moved and counts only how many names took part, which is the one thing a cap-weighted index cannot tell you: an index can reach new highs on a handful of giants while most of the market quietly drifts.
Since 1970 the line has spent 69.2% of its days in a bullish bias, and those stretches have run about 16 months on average. The bias has changed 55 times since 1970, or about once a year. Bearish stretches have been the shorter of the two, averaging 7 months. These are descriptions of the historical record, not predictions.
Source: NYSE cumulative advance-decline line, daily since January 2, 1970. The reading compares the line’s 50-day exponential moving average with its 200-day. This is market context, not a trade signal, and it says nothing about any individual stock. Updated periodically rather than continuously; the as-of date above is the truth.
How this works
Each gauge places the current S&P 500 reading on the empirical distribution of every prior trading day in the historical record. Zone widths reflect actual frequency, not equal-width buckets. So the “Calm” zone is wide because most days really are calm; the “Crisis” sliver on the far left is narrow because crisis is rare.
The forward stats per zone are the median or average of what actually came next, sampled from every historical day in that zone. Recovery time is the median calendar days from that zone back to a fresh all time high. One- and three year forward returns use the S&P 500 Total Return Index, which includes reinvested dividends.
Take this with you. Print it. Share it.
The Market Normality Report goes deeper than the live indicator. Twelve brand-designed pages with the historical context, the forward-return data per zone, and the recent analogs. Free, quarterly updates, perfect for your desk or a client meeting.
Why we built this
The single biggest hit to long term investor returns is panic selling during normal corrections, and the second is selling too early during strong rallies. Both happen because the moment feels unprecedented even when the data says otherwise. The indicator is a small, repeated reminder that most market states have been seen before, and the historical record gives a strong base rate for what tends to follow.
We refresh the snapshot daily after market close. The historical distribution itself is recomputed monthly when fresh price data lands. The math is the same percentile-of-empirical-distribution approach for all four metrics, so the gauges read consistently with each other.
The MNI sits in our Tools catalog alongside the Seasonality research and our personal-finance calculators.
See all tools →Educational and informational purposes only. Not investment advice. Past performance does not guarantee future results.