Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, April 4, 2016

Percent of S&P Stocks Above 50D MA Points to a Market Top

Another way to detect market tops besides the S&P GAAP PE Ratio is the percent of S&P 500 stocks above their 50 day moving average.  The upper chart below is a two year line chart on a weekly time frame showing percent of S&P stocks above their 50 day moving average and the lower chart is the S&P index in weekly bars.

If you look at the top chart and note each time the percent above 50 reaches the top red line, that point corresponds directly with a market sell off beginning in the S&P chart below.  The eight above 50 percent peaks in the top chart produced the eight market rollovers shown with red marks on the S&P chart.  The eighth one is where we are right now.  

Bulls should be very careful here.

Trade well my friends


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