Percent of Stocks on the NYSE > Than 200 Day Moving Average

We've shown this chart several times before, most recently on January 23rd: It is the percentage of NYSE stocks trading above their 200 Day Moving Average.

From that January 23rd trough low, the S&P500 gained ~10% over 10 days; from that February 1 peak, the next 4 days saw a 5.7% selloff. Net net from the January low, we are up 7.25%.

% of Stocks on the NYSE > than 200 Day Moving Average

[click to enlarge]

Chart courtesy of Bloomberg, Fusion IQ

The present reading on the % of NYSE stocks above their 200 Day Moving Average indicator is at readings that -- at least in the early part of the market cycle -- have led to strong rallies in the short run. The first 3 readings (far left of chart) were deeply oversold conditions caused by a) the initial collapse from March 2,000; b) The 9/11 sell off; and c) the sell off following that 9/11 selloff/bounce.

So far, this reading has produced a peak rally reading of 9.6% at its recent high price. This is a far cry from the past bounces.

If you believe -- and this is a big if -- that history will repeat itself, then we still have a ways to run. If you expect those prior bounces were materially different than today, then this rally may run out of steam.

This is a set of circumstances where opinions can legitimately differ.

Comments

[haydete]

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