Goldman Sachs’ (GS) Speculative Trading Indicator is at its highest level since the meme stock mania of 2021 and the Dot-com bubble crash of 2000. The rise has been driven by “elevated recent share of trading volumes in unprofitable stocks, penny stocks, and stocks with elevated EV/sales multiples,” said the investment bank.
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New trading tool for QQQ bullsGoldman added that a basket of retail-favorite stocks is up by 50% since April. That could bode well for the S&P 500 (SPX) over the short term.
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Goldman says that when its retail-favorite basket spikes, the S&P 500 has historically witnessed above-average returns over the next three to 12 months. However, it also leads to below-average returns over the next two years. That was certainly the case for 2021, with the S&P 500 falling by as much as 23% between December 2021 and December 2023.
The S&P 500 has returned 8.19% year-to-date and is up by 15.10% during the past three months.
