Earlier this month, 426 of the S&P 500 stocks were trading above their 50 day moving averages. That figure has declined to a current tally of 398.
Every time in the last three years that more than 400 of the S&P 500 stocks have been trading above their 50 day moving averages, the market has been at or near a short-term peak, and a period of weakness has followed.
Conversely, every time that fewer than 100 of the S&P 500 stocks have been trading above their 50 day moving averages, the market has subsequently rallied.
This relationship can be charted and studied at StockCharts.com with the ticker symbol $SPXA50.
