60% Above Their 50-DMAs
Tuesday, November 16, 2010 at 04:52PM Last Wednesday we asked whether or not the initial pullback in market breadth would turn into something more. As shown in the chart of the percentage of S&P 500 stocks trading above their 50-day moving averages, the initial pullback has turned into a pretty significant rollover so far. The movement in the indicator over the last month or so looks eerily similar to its movement in the Spring (highlighted in gray). Long investors are hoping the similarities come to an end very soon.
The Energy sector got hit hard along with everything else today, but it still has the strongest breadth of all ten S&P 500 sectors. Ninety percent of stocks in the Energy sector remain above their 50-day moving averages. The Utilities sector is a different story. Just 24% of stocks in this sector are above their 50-days. The Financial sector is the only other one with less than 50% of stocks trading above their 50-days.
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Reader Comments (2)
I agree with the five points listed above. It is very difficult for me to get excited about the recent upturn in stock prices. In my view, as long as Barrack Obama is our president, it is impossible for me to feel comfortable owning equiteis. President Obama does not like capitalism and free enterprise and he wants to redistribute the wealth in America. He is not going to promote favorable business conditions for our economy to grow and prosper. However, we are experiencing a terrific trading market. I am having one of my best years trading ETF's. As far as making long term investments, I would advise against that approach.
I love these guys who are making money hand over fist while trembling in their boots, hating Obama, and inventing an imaginary world where the party most responsible for the debt crisis is now hailed as saviours. This kind of mental confusion shold tell us something about the world of lies we now inhabit. Those who simplify the problem and tell the most lies get the vote. Let's hope those left standing after the present moral colllapse has run its course don't find themselves in a wasteland where all t heir wonderful money buys only a mess of pottage.