The percentage of stocks trading above a specific moving average (or the degree of participation) is a breadth indicator that measures internal strength or weakness in the underlying index.
The 50-day moving average is used for the short-medium term timeframe, while the 150-day and 200-day moving averages are used for the medium-long term timeframe.
Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences.
$SPXA50R (S&P 500 %Above 50-day SMA) is a breadth indicator that measures the degree of participation and is used for the short-medium term timeframe.
Participation would be deemed relatively weak if the S&P 500 moved above its 50-day moving average and only 40% of stocks were above their 50-day moving average. Conversely, participation would be deemed strong if the S&P 500 moved above its 50-day moving average and 60% or more of its components were also above their 50-day moving average.
On 12/15/2018, $SPX (2560) is way below its 50 DMA (2730) and $SPXA50R is 24.60. In [1], Bespoke Investment Group, use $SPXA50R to monitor internal strength or weakness in the S&P 500 index and they classify the degree of participation into 5 zones: Extreme Overbought, Overbought, Neutral, Oversold, and Extreme Oversold (see Figure 2 above). This is one of the key indicators to keep an eye on.
$SPXA150R (S&P 500 %Above 150-day SMA) is a breadth indicator that measures the degree of participation and is for the medium-long term timeframe.
In [6], it states that $SPXA200R is the most important indicator right now. It measures the percentage of stocks within an index (S&P 500 in this case) that are trading above their respective 200-day moving averages. The 200-day moving average is commonly used to identify the direction of the trend. If a stock is trading above the 200-day moving average, it’s often considered to be in an uptrend and vice-versa. Therefore, this indicator is essentially measuring the percentage of stocks within the S&P 500 that are in confirmed uptrends.
Neil Blalock in the article points out that 50% is a critical threshold to watch on this indicator. The big clue here is:
The 50-day moving average is used for the short-medium term timeframe, while the 150-day and 200-day moving averages are used for the medium-long term timeframe.
Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences.
$SPXA50R
$SPXA50R (S&P 500 %Above 50-day SMA) is a breadth indicator that measures the degree of participation and is used for the short-medium term timeframe.
Participation would be deemed relatively weak if the S&P 500 moved above its 50-day moving average and only 40% of stocks were above their 50-day moving average. Conversely, participation would be deemed strong if the S&P 500 moved above its 50-day moving average and 60% or more of its components were also above their 50-day moving average.
On 12/15/2018, $SPX (2560) is way below its 50 DMA (2730) and $SPXA50R is 24.60. In [1], Bespoke Investment Group, use $SPXA50R to monitor internal strength or weakness in the S&P 500 index and they classify the degree of participation into 5 zones: Extreme Overbought, Overbought, Neutral, Oversold, and Extreme Oversold (see Figure 2 above). This is one of the key indicators to keep an eye on.
$SPXA150R
$SPXA150R (S&P 500 %Above 150-day SMA) is a breadth indicator that measures the degree of participation and is for the medium-long term timeframe.
$SPXA200R
In [6], it states that $SPXA200R is the most important indicator right now. It measures the percentage of stocks within an index (S&P 500 in this case) that are trading above their respective 200-day moving averages. The 200-day moving average is commonly used to identify the direction of the trend. If a stock is trading above the 200-day moving average, it’s often considered to be in an uptrend and vice-versa. Therefore, this indicator is essentially measuring the percentage of stocks within the S&P 500 that are in confirmed uptrends.
Neil Blalock in the article points out that 50% is a critical threshold to watch on this indicator. The big clue here is:
More pain could be coming if this is violated, similar to what we saw last October.For more details, you should read below companion article:
Technical Analysis—200-day Moving Average
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