The S&P 500 is Running on Fumes

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.

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