Just an idea I was working on to relate the price of the S&P (SPX) to the number of stocks above the 200 day (S5TH). The pattern of 200avg vs price is not always clear. You can see that since Sept 2021 the 200avg has fallen noticably, but the S&P has conintued to climb higher. I general see this as invetors flocking to the big heavy weights like Apple and Amazon that have an oversized influence on the S&P due to their weighting. More often than not, as the 200avg declines the S&P levels off or starts to fall. One thing that does seem very clear is that once it falls down to 40% of the S&P stocks above 200avg, then a sizeable correction is upon us. I marked them in the chart with a vertical line.
It is anyone's guess when the massive bubble will pop, but if the trends hold then I am guessing around May or June of this year.
It is anyone's guess when the massive bubble will pop, but if the trends hold then I am guessing around May or June of this year.
