NYSE Indicators of Market Condition
Posted on Friday, February 6th, 2009 | In Market CommentaryMarket condition indicators on the NYSE cover more than 3,000 companies, compared to the 500 companies of the S&P 500. Let’s see how that larger group is doing.
The chart below presents several indicators:
- percentage of stocks with bullish Point & Figure charts
- 20-day, 50-day, and 200-day simple moving average of the NYSE index
- percentage of stocks above their 50-day simple moving average
- percentage of stocks above their 150-day simple moving average
- percentage of stocks above their 200-day simple moving average
(click image to enlarge)
daily 1-year NYSE chart
Just as the generally sideways movement of the index price and slightly downward shorter-term moving averages indicate, the percentage of bullish stocks (top frame) at 44% shows an undecided to slightly negative investor outlook.
Similarly, the 47% of stocks above their 50-day moving average (third frame from top) is non-committal as to trend. The 12% and 9% of stocks above their 150-day and 200-day moving averages show there is a long way to go in those dimensions before we are in a bull market.
Going back 7 years to a prior market low period and the subsequent rise, you can see that much higher percentages of these indicators are seen in up trending markets. You also see an inversion of the relationship of the moving averages compared to the 1-year chart.
monthly 7-year chart
We are watching, but still waiting for clear signs of a change in direction for the US stock market. It will come, but it is not here yet.
Richard Shaw
QVM Group LLC
Last 5 posts by Richard Shaw
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 About Richard Shaw (http://www.QVMgroup.com)
Richard is a principal of QVM Group LLC, a fee-based investment advisor based in Connecticut with clients across the country. He provides investment coaching to "do-it-yourself" investors, and manages portfolios for those who prefer not to make their own decisions. His investment approach is based on value, asset allocation, benchmarking, expense control, risk management, customizing portfolios to each client's specific circumstances, and regular communication about strategy and performance. The QVM Group team also provides municipal refinance services, strategic business planning and financial analysis service for new ventures, private acquisition analysis, and custom investment research. Richard's extensive experience, includes serving on the Board of Directors of Aberdeen Asset Management PLC (London Stock Exchange: ADN), membership on the Board of Directors of Phoenix Investment Counsel (renamed Virtus Investment Advisors), a U.S. pension manager and investment advisor to the Phoenix Funds (renamed Virtus Funds), as well as serving as Managing Director of a series of offshore investment funds based in Luxembourg. He has led institutional asset management sales and had overall responsibility for management of a U.S. mutual funds broker-dealer. He was a charter investor and member of the Board of Directors of several internet companies, including Lending Tree prior to its IPO. He is a graduate of Dartmouth College. QVM Group LLC is a Registered Investment Advisor. Visit the QVM Group website http://www.qvmgroup.com/QVMinvest/ |
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