Saturday, January 8, 2011

% SP500 Stocks Above 50MA

The % stocks above the 50ma is a very useful tool for signalling potential market turns.  There are a number of ways to use it but one of the easiest is with the MACD of the % stocks above 50ma indicator.  The chart shows that in every instance when the MACD gave a sell signal AND the indicator was making a lower high (marked with the red circles) a market decline/correction followed.  When the indicator was making a new high sometimes a decline/correction followed (magenta circles) and sometimes it didn't (unmarked).


The current setup indicates a decline/correction is near at hand, unless the signal reverses.

2 comments:

Anonymous said...

I read your analysis frequenlty and consider your views well thouht-out. Keep up the excellent work. Like you, I see five waves down from the high and see a sell off starting on Monday.

JB

Trader Craig said...

JB,

I truly appreciate the support, and I plan to continue with this work for as long as I can.

Craig