Thursday, April 1, 2010

% of Stocks Over 50 Day Moving Average Reaching Rally Extremes in both S&P 500 and NASDAQ 100

Obviously we are sitting at some very overbought levels.  Below are the % of stocks over their 50 day moving averages in both the S&P 500 and NASDAQ 100.  The [broader] NASDAQ Composite is not so extreme, but since the whole NASDAQ is essentially Apple (AAPL), Google (GOOG), (AMZN), Priceline (PCLN), and (BIDU), I don't think the computers care much about what else in the index.

[click to enlarge]

What struck me by these charts was how QUICKLY so much damage was done in late January to mid February.  I remember when up to the last week of that selloff every stock but 4 I owned was stopped out as it broke support (in most cases, the 50 day moving average) and then in the flush down to fill gaps created in 2009 on the S&P 500, even those 4 broke support if only for a few days.

Of course since then, it's been non stop fun and joy.  As long as you drink Kool Aid and never sell a stock assuming the market can fall over 0.5%. 

And with that I bring you the broken record "We're overdue for a correction, even of the 3-5% variety". 

Nah, April Fool's! We're rallying straight through 2012 or S&P 2000 - whichever comes first!

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