Percentage of Stocks Over 20-day Average

One chart stood out in my weekly review – the percentage of stocks over their 20-day moving average. Pull up this extended long-term chart stretching back to January 2003 and note the line at the 75% level. It’s very unusual to see this indicator remain at such a high level for more than a week. We’re just coming off an 11-day streak that ended August 6th, marking the sixth cluster of 10+ days over 75% since the beginning of last year. Prior to 2009 we have to look back to the 2003 period to find the next cluster of 10+ days, with only nine occurrences in total since 2003. I bring this up because in each of the previous occurrences, these clusters of broad participation have been a bullish indication looking out one month (20 trading days). So far this time has been different, but there’s still two and a half weeks to go…

Percentage of Stocks >20d Avg Over 75% Ten Consecutive Sessions
08/04/10… S&P500 -4.3% (open – ends 9/1)
03/12/10… S&P500 +4.0% one month later
09/23/09… S&P500 +1.9% one month later
07/28/09… S&P500 +4.9% one month later
05/12/09… S&P500 +3.4% one month later
03/30/09… S&P500 +8.6% one month later
01/16/04… S&P500 +1.5% one month later
06/09/03… S&P500 +3.3% one month later
05/09/03… S&P500 +4.6% one month later

Categories : Archived EOD Commentary, End-of-Day Commentary

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