3 Momentum Studies Forecast Big Upside for Stocks

Records have been set.

The S&P 500 has hit 24 fresh all-time highs in 2026 so far.

Better yet, the S&P was up 14.9% in the second quarter, the best midterm-year second quarter ever… and the fifth-best Q2 of any year since 1950.

The good news is the party isn’t over. WHY?

3 momentum studies forecast big upside for stocks.

As major indices consolidate these amazing gains, many are skeptical the rally can continue.

History proves otherwise.

On June 1, we made a macro bull case for equities in Raising Our S&P 500 Price Target to 8200.

Today, we’re doubling down with 3 momentum studies signaling big upside ahead.

It turns out that huge gains are a reason to double down rather than cash out.

What’s more, midterm years usually finish strong, with November and December seeing outsized gains once electoral uncertainty passes.

Don’t listen to the doomers telling you to sit this one out.

Momentum is shifting to new areas – it’s not just the AI trade anymore.

We’ll highlight an updated list of sectors and stocks seeing huge flows.

3 Momentum Studies Forecast Big Upside for Stocks

This bull market is now the 7th best since 1950 with the S&P 500 up 111% since October 12, 2022.

Now everyone wants to know if stocks can keep rallying.

Fortunately, today we’re answering this million-dollar question.

The answer is yes, stocks can go higher.

9 Week Win Streaks are Historically Bullish

The S&P 500 finished May up 9 weeks in a row. It was only the 11th time that's happened since 1950.

Looking at what’s happened after prior nine-week rallies, continued upside is the norm.

In fact, 6 and 12-months later, the S&P 500 has been positive 70% and 80% of the time, respectively.

Even better, the index notched median gains of 8% and 12%, respectively, both of which are well above average:

OK we know stocks can keep doing well even after they’ve been red hot, now let’s zoom out a bit.

Stocks Just Doubled their 6-Month Average Return

Top percentile rips like the 15% gain in April and May are great, but they’re extremely rare.

Here’s a much broader momentum study focused on what performance looks like after something that happens much more often - top quartile S&P 500 gains.

The S&P 500’s average six-month gain is 4.8% since 1990 (chart).

That puts its 9.5% first half price gain in the top quartile of historical observations.

Here’s the best part.

Since 1990, the S&P 500 has averaged a 13.2% gain in years following top-quartile six-month rallies, compared to only a 9.6% gain in an average 12-month period:

History’s message is clear.

Whether stocks are smoking hot or just posting solid gains, strength is a reason to double down, not cash out.

OK let’s shift gears and check in on what the election cycle can tell us about stock market momentum.

Stocks Finish Midterms Years on a High Note

The four-year presidential cycle is one of the most widely cited historical stock market patterns.

Investors focus on it because it’s worked really well over a long period of time.

The 12-months following midterm elections have consistently produced positive returns with the S&P 500 up 95% of the time since 1950.

Better yet, post-election, S&P 500 12-month gains have averaged 14% (chart), a 50% premium to the 9.5% long-term average annual return.

2026 has been choppy. That’s normal for a midterm year. Expect a very strong finish once we clear the election in early November.

What This Means for Your Portfolio

We’ve made a historically driven bull case for stocks. Now, let’s tackle portfolio construction.

History says respect momentum – it tends to persist.

Momentum is the best preforming factor YTD up 25.5% vs. 9.8% for the S&P 500, as of July 13.

We regularly see healthy profit taking in top momentum names. We think these dips are buyable as we expect momentum stocks to continue to lead the market higher through year-end.

But the make-up of momentum is broadening out – it’s not just the AI trade anymore.

The market is rotating and the momentum factor now includes health care and real estate, in addition to long standing leadership from tech, industrials, energy and financials.

Our sector rankings key off momentum so it’s no surprise tech, industrials, financials, energy, health care and real estate top the latest list:

While most research houses were too conservative and got it wrong the last few months, MoneyFlows got it right.

For access to the below list of stocks, become a PRO Member or if you’re a money manager or RIA, contact us about our Advisor Solution subscription.

Some of the best bets in the market today are high-quality momentum names.

Not only because of their relative performance, but due to their earnings momentum as well.

Below, for PRO subscribers, is a list of the Outlier 20 momentum stocks ranked by our proprietary MAP Score.

Many of the stocks below have been massive winners for us.