Market Status

The charts will be updated by every Saturday. When no change to text, [NC] will be used.

Stocks above their 50-day Moving Average



[NC]  This chart shows the number of Nasdaq stocks that are above their 50-day moving averages. The horizontal lines at 20 and 75 are arbitrary, and sometimes tend to indicate when a move is nearing an end. The Nasdaq composite index ($COMPQ) is shown below on a percentage scale for correlation.

[NC]  When this indicator is near a high extreme, it indicates an overbought market, but the market can continue up. A drop near 20 indicates a very oversold market. 

[NC]  Notice that there was a negative divergence between the indicator and the Nasdaq index in the spring of 2023. This indicates that the rally is not as strong as it appears by the index. This time the market continued up -- surprise! That was because this market-weighted index is dominated by a few large tech stocks.

[NC]  In May/June and October there was a rally after a positive divergence. The April 2023 high in the Nasdaq ($COMPQ) was not verified by the number of Nasdaq stocks above their 50-day MAs. This is an indication that the market will go lower.  But maybe not as it went higher! In August there was a confirmation, not a divergence.  Now the indicator is coming down from an overbought condition and the market is goint up!  The huge technology stocks are moving the market.


Bullish Percent Index

[NC]  The Bullish Percent Index ($BPSPX) for the S&P 500 stocks is shown together with the S&P 500 Index ($SPX) in dotted blue. The Bullish Percent Index takes a group of stocks and records the percentage of those stocks that have a Point & Figure Buy signal from their point and figure chart. The BPI for the S&P 500 stocks is shown over a 1.5-year period.  





 

[NC]  The green buy pole indicates when the index goes above 30. The red sell pole indicates when the index goes below 70. These seems to be a good indication of future market action. The sell alert flashed on August 8. A bull alert occurred on October 9, however, that was reversed to a sell confirmation. On November 3 a true bull alert occurred. The market at the end of December was very overbought.  A consolidation was likely, and is over now. Even though the bullish percent is going down, the SPX is going up due to the large tech stocks that make up 35% of the index.

Sector Bullish Percent

[NC]  Looking at the BPI of sectors is a good way to get a feel for how they are performing. Click here to see charts for ten S&P market sectors


Volatility

[NC]  The Volatility Index (VIX) shows the large-cap market's expectation of 30-day volatility. The index is based on prices of S&P 500 options that investors tend to rush to when they are fearful of stock declines. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". When the fear is highest, the market is likely to bottom and start up as all those in fear would have sold. There is greater detail at Investopedia.com. 

[NC]  Below is a one-year plot of the VIX with the S&P 500 on a percentage scale at the bottom. In the middle is the RSI of the VIX. When the RSI hits the blue 60 line there is danger of a decline (starts with a red vertical pole). When the RSI hits 45, green pole, the probability of making money in the market can be much better. All indicators lag the market, and are not good in a choppy market. A green pole will not be placed if the VIX is above 20, and a buy alert will be canceled if the VIX goes above 20. Note also that low points in the market usually occur when the VIX peaks. 

[NC]  A VIX Buy Alert, based on the volatility of large-cap stock action, occurred on Thursday 11/2 (green pole). The traditional view is that it is dangerous to be in the market when the VIX is above 20, and this had not happened since March 2023, except for a short time starting on 10/19.



Margin Debt Impact

[NC]  Notice the relationship of margin debt to the market. This is the S&P 500 index. As Jill Mislinski states, "there are too few peak/trough episodes in this overlay series to take the latest credit balance data as a leading indicator of a major selloff in U.S. equities. This has been an interesting indicator to watch and will certainly continue to bear close watching in the months ahead."  

Margin Debt



This page is for amusement only, and should not be taken as advice to buy or sell anything.