Earlier today, this went out to our research clients:
we noted the % of NYSE stocks trading below their 200 day moving
average was about 23%. That suggested we were close, but not at a
Today, our trusty Bloomberg terminal is showing just 13% of NYSE stocks trading above their 200-day moving averages.
That is lower than anytime in the 2000-02 bear market. And lower than anytime in the 1998 and 1994 bear markets.
This indicator is saying that sentiment has become excessively
negative — considering we are only 3 months off of the all time
This suggests we should begin the counter-trend rally shortly. We
would expect this to last anyway from 2 weeks to 2 months, run 5-15%.
We also would use this upcoming lift as an opportunity to sell equities.
This is a bounce, not a major shift in trend . . .