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 25 and 75 are arbitrary, and somethimes 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 25 indicates a very oversold market. 

[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 diversions shown. 

[NC]  The positive divergence in Feb/March 2022 fortold the rally that occurred.  Another positive divergence occurred in May/June. That rally was amazing!  In October there was a rally after a positive divergence. The April high in the Nasdaq ($COMPQ) was not verified by the number of Nasdaq stocks above their 50-day MAs. This is a severe indication that the market will go lower.

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 cycle. 
 

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]  VIX Buy Alert, based on the volatility of large-cap stock action, occurred on Friday 3/31 (green pole). The previouse Buy Alert occured on  Friday 3/10//2023 (red pole). The traditional view is that it is dangerous to be in the market when the VIX is above 20.  

Margin Debt Impact

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