Percentage of Stocks Above 50-Day Moving Averages Shows Market Strength

Below we highlight the percentage of companies in the S&P 500 and its ten sectors that are above their 50-day moving averages. As shown, recent market action has pushed these breadth measures to 2008 highs.

Currently, nearly 70% of stocks in the S&P 500 are above their 50-day moving averages. Even though the market is well below its highs from last October, breadth is getting close to the same levels that it was at back then. Even 70% of stocks in the Financial sector are above their 50-days. Industrials, Energy and Utilities are all above 80%, while Consumer Staples, Consumer Discretionary, Health Care and Telecom rank the worst.

Comments

[User 143167:]

People said when 80% of stocks traded BELOW 50 DMA indicated market bottom. Now you said 70% of stocks traded ABOVE indicates market strength.
My conculsion: It is a Perma-bull's indicator.

2008 Apr 21 06:04 AM

[vaduz:]

are we already overbought?? i think we are aproaching.

2008 Apr 21 07:28 AM

[bruce123:]

I do not see any tradable value to this information. I'd rather look at the bullish percent index at stockcharts.com. This site shows the bullish percent of Nasdaq 100 is 40%, S&P 100 is 55%, S&P 500 is 48%, Dow 30 is 53%, Finance is 54%, Utilities is 40% etc. So, where is the value of the 50-day moving average if only a few of these stocks are in the bullish arena?

2008 Apr 21 03:51 PM

[Hankhawk:]

First of all we're in a recession and there are many negative
things to come public which could change motivation and
action of trends. negatively quickly.
Second, 50 day avg. is much too short of
duration -- I'm more interested in 100 day avg. -- like to
see their figures for that.

I wouldn't be buying on the basis of their charts.

2008 Apr 21 05:23 PM

[Kunst:]

I look at these charts and the last big peak I see was leading up to October '07. Was that a good time to buy?

2008 Apr 21 06:01 PM

[Pauly B:]

We wll see after this earnings cycle if it can stay above the 50.

2008 Apr 21 07:09 PM

[cynic69:]

Is this a rally we can get excited about? I don't see any volume to speak of. Could it be that the sharks are setting us up for a fall? Is it possible that the world economy will stage a knock out rally while the peasants are staging food riots in the streets and the truckers have the parkways blocked because they can't afford to buy fuel. Is it possible that the stock market will skyrocket when consumers can't afford gas for a fill up or money to buy anything if they make it to the mall? I'm waiting for the stochastic cross over so I can buy a wagon load of puts.

2008 Apr 22 12:41 AM