Even though the S&P 500 is in a new bull market, the percentage of stocks in the index trading above their 50-day moving averages is still at oversold levels. As shown in the chart below, at 26%, this indicator has a long way to go before becoming overbought.
On a sector basis, Telecom, Utilities, and Consumer Discretionary have the highest percentage of stocks above their 50-days, while Energy and Financials have the lowest.
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Can't believe you're not taking a lot of heat for that "S&P 500 is in a new bull market" remark. This notwithstanding, I agree there's a long way to go before an overbought condition registers in a number of technical measures (which right now are shaping up rather positively). Given the seeming widespread doubt in near-term prospects, I would not be surprised at all if an overbought condition comes sooner rather than later. Just can't help but see how, technically speaking, this bad boy is poised to explode higher.
Posted by: Tom Chechatka | December 10, 2008 at 07:38 PM