75% Of Stocks Remain Above Their 50-Day Moving Averages

by: Bespoke Investment Group

As shown below, 75% of the stocks in the S&P 500 are currently trading above their 50-day moving averages. This indicator has been trending slightly downward for about a month now, but it hasn't fallen below the 75% mark for quite some time. Generally, whenever this breadth reading gets above the 80% level, the market is due for a breather.

All of the stocks in the Telecom sector are currently trading above their 50-days. Unfortunately, there are only 5 stocks in the sector. The next two sectors with the highest breadth readings are Financials and Technology at 83.3%. This is positive for market bulls since these are the two largest sectors of the market. If Tech and Financials are doing well, chances are the broad market is doing well. Three other sectors have breadth readings above the overall S&P 500's reading of 75% -- Energy, Health Care and Materials. The four sectors with below-market breadth readings are Industrials, Utilities, Consumer Discretionary and Consumer Staples. The two consumer sectors have the lowest percentage of stocks above their 50-days. Discretionary is at 65.5% and Staples is at 60%. While readings at 60% or above are strong, we'd like to see consumer sectors outperforming instead of underperforming.