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Point & Go Figure: S&P 500 Field Position


Who's in control now?


Market Overview:

The broad bullish percent indicators for the NYSE and the Nasdaq Composite are now negative for the first time since last October. Last Wednesday they joined the narrower S&P 500, Nasdaq-100 and Dow Jones Industrial Average bullish percent indices, which were already negative.

Meanwhile, both the NYSE Percent Above 50-day Moving Average Indicator and the Nasdaq Percent Above 50-day Moving Average Indicator continue to move lower nearing, and in some cases moving below, the 30% level below which they typically form a short-term trading low. The High-Low Indices for the NYSE and Nasdaq are both in Os and also nearing the 30% level below which relief bounces can occur.

With the overall context now negative, however, any move higher should be short-lived and in my opinion provide an opportunity for longer-term sales or hedges.

Charts of Interest:

S&P 500
(Chart courtesy
Today everyone, including yours truly, is focused on the S&P 500 1280-285 level as a natural area of contention for this relief rally. Meanwhile, the 1250-1255 level is the nearest and most significant support level.

S&P 500 Bullish Percent
(Chart courtesy
Let's look at our field position for the S&P 500 based on the bullish percent indicator. We remain above 50%, and well away from the 12-16% levels reached during 2001 and 2002. Note the lower highs this indicator has made since January 2004, meaning there are fewer and fewer stocks generating point and figure buy signals despite the SPX move higher since then. This is a significant bearish divergence and among the reasons I believe we are in a secular bear market, not a new bull market.
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