S&P 500 200-Day Moving Average Spread at -32%
Multiple market pundits have recently mentioned that the S&P 500 is trading the furthest below its 200-day moving average since the Great Depression. Below we have plotted the 200-day spread indicator going back to 1927. The index is currently trading 32% below its 200-day moving average, which is indeed the most negative spread since 1937. While the spread can remain negative for quite some time, the reaction to the upside has been extreme once the market turns. In the 1930s, and even following the big declines in the 70s, 80s, and early 2000s, the spread turned violently positive in the months following the ultimate low in the 200-day spread. Unfortunately, nobody knows when that low will be.
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Hi Be Spoke Invest,
I'm emailing you in regards to a followup email I sent you a month ago in response to a partnership, have you had a chance to think about it?
If you have any questions or would more information, please advise me and we can go from there.
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Andrew Knight
Posted by: Andrew Knight | November 17, 2008 at 07:27 PM
well, part of it could be due to market manipulation. indices start diving 10 minutes before close, day after day, like clock work.
Posted by: a reader | November 18, 2008 at 12:43 AM
well, those MA's are screaming lower each day, so the 'sideways ' movement of the last few days and next week should get them back in line
I've studied these spreads and it's not a good shorterm money trade
Love your work here. Thx
Posted by: Max2205 | November 18, 2008 at 09:50 AM
Lol, it's "200" days average, of course it's not a good "short" term money trade.
Posted by: Adrian | November 18, 2008 at 11:55 AM
Great chart. Stocks are SO oversold!
Posted by: Greg Feirman | November 18, 2008 at 12:46 PM
stocks are not oversold... they were overbought.
see you at the bottom.
Posted by: gamma | November 18, 2008 at 01:51 PM