Usually, you want a bull market to have breadth but on occasion things get quite over extended and even the weak stocks start to run. This is reflected in the market breadth and when it gets too high, it's time to start preparing for a correction
Key Markets: Ratings
Yesterday evening I reviewed several names in my report THE SUM OF THE CHARTS. These included NPN , GLN , SSW , AMS and more.
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S&P 500 vs its stocks above the 200 day MA:
Bottom chart shows the S&P since 2008.
The chart on top, tracks the percentage of stocks above their 200 day Moving average for stocks that make up the S&P 500 .
In April of 2021, 96% of the S&P stocks traded above their 200 day MA. Currently just 21% remain above their 200 day MA.
Below the 30% thresh-hold it would...
While the general market indexes has been unconstructive (top chart) the stocks underneath the service are improving (bottom chart).
In this case we are looking at the stocks in the SP500 that are above their 200D MA (Picture is similar for the Nasdaq) - this is a bullish indicator and the reason why I am starting to dip toe in the water.
Remember this is was...
BREADTH: S&P 500 Stocks Above 200-day MA (%) - 16-Year Trend
47% of S&P 500 shares closed above their 200-day SMA's. The mid-point of the 16-year trend.
I don't know if I even have to explain this chart. Is just too easy to see.
The number of SP:SPX stocks above its 200-day MA confirmes a bear market when crosses below 50, and confirms a bull market when crosses above the same level and stays there.
It has happened for the last 3 bear markets.
Also, is good to point out that is better to use it for bottoms...
This idea is based on the analysis of the 200 day moving average breadth data for the SPX. Every time since 2007, when market breadth broke out of a downwards moving channel this was an excellent buying signal for the SPX. This signal can be seen as a confirmation for the end of the downwards correction and/or bear market. We recently had such a signal on Oct 24th!.
What I've shown in this video is an indicator to determine market breadth. When breadth reaches the extreme lows (like it did 2 weeks back), massive multi year bottoms have followed. However, this time I think it'll just be a multi week bear market bounce as we are in a long term bear market.
TAKEAWAY: SPY could go up to ~430 which would translate to ~17% rally...
Generally speaking, it is never a good sign when 50% or more of the S&P 500 stocks are trading below their 200 day moving average (DMA). The % over 200dma graphed here is displaying a negative slope, and this is not indicative of a bull market. March may have yielded a $SPY relief rally that initially looked good, but has now run its course after retracing...
Lors des recessions de ce siecle, on a atteind le même niveau sur le S5TH
Lorsqu'atteins une première fois, on avait "effectué" la moitié de la récession
In this video, I've shown a means of measuring the current breadth in the market. It's at extreme lows which have historically marked major bottoms for the market.
TAKEAWAY
Combining this with my cycle analysis, I think a rally is coming over the next 6 weeks
Stream of thought Looking at Extremes for % of Stocks Under/Over their respective 200DMAs in the S&P .
Lot more context is needed to refine the strategy like Where % of Stocks Under/Over 200
Stream of thought Looking at Extremes for % of Stocks Under/Over their respective 50DMAs in the S&P .
Lot more context is needed to refine the strategy like Where % of Stocks Under/Over 200
Will go through each part individually then put them together.
Stream of thought Looking at Extremes for % of Stocks Under/Over their respective 20DMAs in the S&P .
Lot more context is needed to refine the strategy like Where % of Stocks Under/Over 200 & 50 DMAs .
Will go through each part individually then put them together.
