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Wide Breadth of Stock Market Decline Leaves Only 4% of S&P Above 50-Day SMA

by Brett on July 2, 2010

The recent stock market decline has not only been sharp – shedding the year’s worth of gains in a matter of weeks – but it’s also had some very impressive breadth.

Bespoke Investment reports that just 4% of S&P 500 stocks current sit above their 50-day moving average.  So, everything is getting clobbered!

The percentage of stocks in the S&P 500 now trading above their 50-day moving averages is down to 4%.  At the March 2009 lows, the reading only got down to 5%, so that gives investors a good idea of just how extreme this decline has gotten.

Great chart here from Bespoke, plotting this average back to 2006.

Hat tip to Phil’s Stock World for the link to this in his daily newsletter.

This jives with our hypothesis that in a true Depression bear market decline, one that is highly deflationary in nature, few if any stocks will be safe.

Further Reading: What stocks (if any) are safe right now?

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More on this topic (What's this?)
Nearly 70% Of S&P 500 Stocks In Correction Or Bear Market Territory
S&P Approaches Critical Tipping Point
S&P500 Getting Ready to Break
Read more on S&P 500 (SPX) at Wikinvest

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