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 25
and 75 are arbitrary, and tend to indicate when a move is nearing an end.
The Nasdaq composite index ($COMPQ) is shown below on a percentage scale
[NC] Notice that there
was a negative
divergence between the indicator and the Nasdaq index in the summer of
2020 and spring and summer of 2021. This shows that the
rally is not as strong as it appears by
the index. This market-weighted index is dominated by a few large tech
stocks. The index fell after the negative
[NC] The positive divergence in Feb/March fortold the rally that occurred.
Bullish Percent Index
[NC] The Bullish Percent Index ($BPSPX) for the S&P 500 is shown together with the S&P 500 Index ($SPX) in blue.
[NC] 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 is
shown over a 2.5-year period.
[NC] If the BPI is above 80,
all is well; above 65 probably indicates that a correction is a
dip-buying opportunity; below 65 means that there may be a
more serious correction coming. When
the index drops below 50 and then goes above 50, it is likely a good
time to buy as shown by the green vertical poles -- unless in a bear
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.
[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
[NC] VIX Sell Alert,
based on the volatility of large-cap stock action, occurred on Friday 4/22 (red pole). The traditional view is that
it is dangerous to be in the market when the VIX is above
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."
This page is for amusement only, and should not be taken as advice to buy or sell anything.