Percentage of Stocks Above 50-Day Moving Averages

The percentage of stocks in an index or sector trading above their 50-day moving averages is one of many breadth indicators that we follow.  Very high readings are indicative of long-term underlying market strength, but they also suggest that things might be a little too overbought in the short-term.  As shown below, 87% of the stocks in the S&P 500 are now trading above their 50-day moving averages.  The only time current levels were eclipsed over the last year was back in March/April just before the correction started.  As you can see, the reading remained around 85%-90% for about a month before pulling back.

Telecom is the only S&P 500 sector with 100% of its stocks above their 50-day moving averages.  The sector only has 9 members, however.  The Energy sector has the second-most stocks above their 50-days at 95%, followed by Utilities (94%), Health Care (94%), and Industrials (91%).  Materials and Consumer Discretionary are both at 90%, Financials and Technology are both in the low 80s, and Consumer Staples has the lowest reading at 71%.

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