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NYSE % of stocks > than 200 Day Moving Average

Thursday, January 17, 2008 | 11:00 AM

in Psychology/Sentiment | Technical Analysis

NYSE % of stocks > than 200 Day Moving Average

chart courtesy of Fusion IQ

As seen on the chart above the percentage of NYSE stocks > than their 200 day moving average has slipped (not incl. today) to almost 20%. This reading is similar to readings at other past significant lows such as the 1998 low and the 2002 low.

That said we don’t think we have seen the absolute low in the markets yet given the recent trend line break in the S&P 500. However, given these indicator readings we are starting to see the signs of a capitulation building -- one more shot down may be necessary to set a better, more solid low.

NOTE: When the % of NYSE stocks over their 200 day moving average drops to ~20%, it gives a reliable buy signal . . .

UPDATE: January 17, 2008 4:00

This is a 10 year, weekly chart. I thought that was self explanatory, above. Some of you seem, tot hink this is a bottom call right now. It is not precise to the day. When you look at the 1998 and 2002 lows, these are processes that develop over weeks and months. I thought that was clear from the graph, but apparently a few of you misunderstood it. I regret any ambiguity.

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Tracked on Jan 17, 2008 11:09:21 PM