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Market Bulls About To Reawaken at Trader’s Narrative

Market Bulls About To Reawaken

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:
percentage stocks SPX 10 day moving average november 2007

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

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8 Responses to “Market Bulls About To Reawaken”  

  1. 1 gosu

    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?

  2. 2 Johan

    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.

  3. 3 Ofir


    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?


  4. 4 Babak

    Ofir, try with $NAHLR and $RHCOMPQ

  5. 5 Ofir

    Babak thanks,

    I was hoping to find this indicators in Yahoo so I can use them in my technical analysis software.


  6. 6 Babak

    Ofir, as far as I know, Yahoo Finance doesn’t offer this indicator.

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