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SP500: Ratio % Stocks Above 200 DMA: Too Bullish?
July 15 2016 ( From Tradeview )
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We observed that the Ratio of the Percentage of Stocks of the
Mighty SP500 Index Above the 200 day moving average is on a rise
since June 27 with a new high in price ever for the SP500.But few of us realize that the the post-Brexit panic was in fact an
opportunityfor portfolio managers to rebalance at the end of
month/quarter from cash and bonds to stocks. Also,the relative
flight to quality and liquidity was in strong favor of US Equities
and shows how resilient the Mighty SP500 Index is.
The performance of the SP500 index since June 27 is +8.16%
and looks like after the Technical Breakout of July 8 2016
the Stampede of Calgary as Buyers rushed and pushed the
marketon an Overbought Stance on a short term basis.
Also interesting to note the Fear and Greed Index from CNN Money
as of July 14 is now at the Extreme Greed Level of 90.
But what is interesting indeed is that the Ratio of the Percentage of Stocks of the Mighty SP500 Index
Above the 200 day moving average reached on July 14 the Resistance Trendline that started on April 27 2016, level which in previous time was the signal for a short term peak in the SP500 Index.(See Firt Chart Below -Top Panel - Blue Trendline)
Also quite interesting to me is that there is a huge divergence between the Mighty SP500 Index (a new high ever) and not a new high on the ratio since April 27 2016 (Ratio of the Percentage of Stocks of the Mighty SP500 Index Above the 200 day moving average).
(See First Chart Below - Top Panel for the Ratio - Bottom Panel for the SP500 Index - Divergence).
"Chance favors the prepared mind."
SP500: Ratio % Stocks Above 200 DMA: Too Bullish? $SPY #Trading #Investing #SP500 #spy
DAILY RATIO (Top Panel)
SP500 % Stocks Above the 200 day moving average ( Blue Line )
7 DMA of the RATIO ( Red Line )
SP500 Index (Bottom Panel)