Wednesday, October 24, 2007
Secret Recipe Chart
This chart is an overlay of the number of S&P500 stocks trading above their 50 day moving average(GREEN) & the number of S&P500 stocks trading above their 200 day moving average.(RED) What I have observed in this bull market is, when the $spxa50 is below 100 and the $spxa200 is below 250 it has been a good time to buy the S&P500. When I begin to see bearish divergences between the price and the indicator it has been a good time to scale back. Click on this LINK or click on the chart above for a better view. The one thing that is starting to worry me about this indicator is deeper moves downward with both the $SPXA50 and the $SPXA200 and the amount of time it takes them to recover. I'm hoping it just has something to do with a major sector rotation and not the big boy's getting prepared for the worst(Recession). Here's to hoping it keeps working because it has offered up some very nice returns in the past few years.
Labels: major indices, stockcharts, technical analysis
Subscribe to Posts [Atom]
Subscribe in a reader
