The S&P 500 SPY ETF and the Percent of Stocks ABOVE Their 20-Day Moving Average
As of this writing, just 14% of all stocks are above their 20-day moving average. Just 14%! That is the lowest level since the Covid crash. Individual stocks are getting hit really hard right now. If you don't understand what I mean, I'll present it differently: 86% of all stocks throughout the market are trading below their average price of the last 20 days and just 14% are trading above. What a fast sell-off. No one has been spared except for a few big names and indexes.
The indexes seem just fine. The S&P 500 chart on the left shows that. Yes, markets are down, but not nearly as bad as individual stocks. Let me share a stat that really highlights the carnage for stock pickers today:
Some 400+ stocks are down 20% or more in just the last month of trading. 400+ stocks down 20% or more in just the last month. Whoooooosh. What a correction.
I have no idea why this happens. Or how it occurs. But if you have any ideas please share it in the comments! I also wonder if any savvy fund managers or funds are excited as ever, just watching and waiting to find their next great idea on a massive individual sell-off.
Thank you for this view. The rotations within Big tech have been the apparent safe haven, with MSFT and GOOG being the market leaders and AAPL with a move and AMZN playing volatility boss. Meta getting rotated away. Rates are moving like a penny stock, but if they stabilize under 1.5 yield on the 10 year, and we receive good news on the omicron variant, and we see a reversal pattern, maybe Santa arrives in time. The index (Spx) is weighted to be a proxy of big tech, and big tech has been performing well, ARKK and the Russell 2000 look like Dotcom bubble pop. Great post
scheplick
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@Pennywick I was saying the other day that I would rather see more small caps go to medium and large cap then large caps get larger. I’ll never fully understand the lack of bids or interest in small caps among big money.
therichfuller
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Tried to mark out some previous instances around these levels
scheplick
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@therichfuller whoaaaaaa so much good info here. It looks like we could either soar from here or go much lower! A perfect combo for options traders
Super important points about the market internal Stef - Nicely done! I'd add that when a market is in rotation, or narrow like this, stockpicking is the only way to preserve performance. Indexers who put "Active Management" on their prospectus will struggle, while the PMs out there doing the hard work will shine.
Fractured market under the hood for sure, but there are still leaders if you're willing to get concentrated.
Every small investor should read your article and learn from it.
To help them more, I’ll give the bigger picture and they must try to understand it.