Market Bulls About To Reawaken
Published November 22nd, 2007 in Technical Analysis Tags: Lowry, Lowrys, market weakness, moving averages, percentage above moving average, SPX, standard and poors, stephen whiteside.Things are getting very stretched towards the downside and the bears are having too easy a time. That is about to change if history is any guide.
The number of lows has ballooned to critical levels which usually have presaged snapback rallies. Also, Lowry’s research into the percentage of stocks above a moving average is compelling. Specifically they say:
…a number of significant buying opportunities have been identified in the past after periods of market weakness have caused the percentage of stocks above their 10-day moving averages to drop below 10%.
For further details and a historical chart of times when this has happened, see Lowry’s research. Below is a recent chart of the Standard and Poors 500 index (SPX) showing that last week we had just slightly over 90% of the components of the bellwether index trade below their short term, 10 day moving average:
Click to Enlarge Graph:
If you look closely you’ll notice just peeking below the speech bubble on the graph that in mid-August we had a similar situation which corresponds to the intermediate lows we saw then.
Source: Stephen Whiteside at theuptrend.com
Lowry, Lowrys, market weakness, moving averages, percentage above moving average, SPX, standard and poors, stephen whiteside
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8 Responses to “Market Bulls About To Reawaken”
- 1 Pingback on Nov 26th, 2007 at 8:11 pm
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Perfect.
However, I think that your earlier article on the ratio of “percentage of stocks above their 50 day MA, to the percentage of stocks below their 200 day MA” is a better indicator of sharp upturns than the indicator by Lowry you just mentioned.
How do you think that ratio will play out in this volatility?
Yeah, can we have an update on that indicator please.
I think we have hit the bottom, but I will wait for another confirmation sign before going in. Like another 2% drop or a drop with a strong reversal. That will be enough for me.
Hi,
I was trying to locate the symbol for the High/Low index for the Nasdaq or S&P but was unable to. Is there an public index for this data or do you collect the data yourself?
Thanks
Ofir, try stockcharts.com with $NAHLR and $RHCOMPQ
Babak thanks,
I was hoping to find this indicators in Yahoo so I can use them in my technical analysis software.
TradeByTrend
Ofir, as far as I know, Yahoo Finance doesn’t offer this indicator.