Wed Dec 28 2016
I was reading a money manager report just this morning. They said January 2016 beagn with 40% of stocks over their 50 day MA.
today we have 70% and that is much better. Really, I wondered about that and took a look at the chart.
It seems to me that readings below at or below 40 last year signaled an approaching buy level, from which the market rallied.
Readings of 70% or more however, went just prior to a top and reversal in the market. One can make a case that so far this is the third lower high for this year, or am I wrong?
three market lows, three market highs. looks indecisive to me!
Ten weeks from the late Oct low puts us in the second week of January. By that time this indicator should be pretty toppy.
Dow Transports % above 50 week Exponential Moving Average
I did not mark the spots but they are obvious. Buy signals were Oct 2014, January 2016. The Transports have been toppy
when the percentage reaches 90%. Positive expectations seemed fully priced in this market. Let's see what two weeks into January brings.
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