S&P 500 VS STOCKS
Updated
In this idea, I'm simply taking a look at the S&P 500 verses the actual stocks that make up the S&P 500 by using their 200d and 50d averages. This can be useful as an indicator to look for divergences, early warning signs, or confirmational trend changes.
Top pane = SPX stocks above their 200 day moving average
Middle pane = SPX stocks above their 50 day moving average
Lower pane = SPX index
Since May 2021, it's evident that the stocks > their 200 day and stocks > their 50 day have been trending down while as the overall index has been trending up. This is a sizable divergence that could cause a sudden correction in the index. While I'm speculating, I do not believe the indices have put in their major top yet. But that doesn't mean we will not see a sizable correction with weeks or months of volatility. Let's see if the indices can take a chill pill for a while and offer another buying opportunity.
Top pane = SPX stocks above their 200 day moving average
Middle pane = SPX stocks above their 50 day moving average
Lower pane = SPX index
Since May 2021, it's evident that the stocks > their 200 day and stocks > their 50 day have been trending down while as the overall index has been trending up. This is a sizable divergence that could cause a sudden correction in the index. While I'm speculating, I do not believe the indices have put in their major top yet. But that doesn't mean we will not see a sizable correction with weeks or months of volatility. Let's see if the indices can take a chill pill for a while and offer another buying opportunity.
Note
stocks above 50dstocks above 200d
spx
Note
This update has limited resolution because it's from my mobile. But it just shows a similar period in 2015 where the percentage of stocks above their 200d and 50d were trending down in a similar fashion. You can see what happened in Aug 2015Note
TO MY FOLLOWERS, get ready. We are in the process of making some type of bottom in this range. That is my opinion, not investing advice of course. But I'm planning to post some ideas soon that show evidence for a bottom in the making. Exciting times.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.