Connect with us

Hi, what are you looking for?

Stock

Broad Market Rally a Turning Point

Today, we saw broadening of participation by comparing the percentage change of the cap-weighted version of the S&P 500, SPY (+1.50%), versus the equal-weighted, RSP (+2.25%), which shows that today’s RSP advanced 52% more than SPY.

Our biggest beef with the SPY rally was that it wasn’t broad. It was narrowed to big mega-cap stocks, and the rest were not participating. Just look at our bias chart below. Notice where the Silver Cross and Golden Cross Indexes were at similar price levels, reading in the 70s and 80s. We’re setting a new high, and these indicators show broad participation has been almost nonexistent as they read in the 30s and 40s.

Today saw a big shift as participation of stocks above their 20-/50-/200-day EMAs skyrocketed to and past our 50% bullish threshold.

The rally in the SPY has confounded us and, if you look at the comparison between the SPY and RSP, you’ll understand why. RSP’s price chart is what the SPY should’ve looked like, but it didn’t. Why? The difference is capitalization. It worked in the SPY’s favor, but not in RSP’s.

RSP’s breakout from the declining trend looks good and bolsters the new participation numbers we see on the chart above.

Conclusion: This is only one day’s action, but we think it shows a turning point. We’ve often been asked what it would take for us to move to the bull camp, and we always reply “bias”, we need to see the broader market participating. We are seeing that now.

Learn more about DecisionPoint.com:

Watch the latest episode of DecisionPoint on StockCharts TV’s YouTube channel here!

Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2023 DecisionPoint.com

Helpful DecisionPoint Links:

DecisionPoint Alert Chart List

DecisionPoint Golden Cross/Silver Cross Index Chart List

DecisionPoint Sector Chart List

DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    President Biden is asking Congress to approve nearly $100 billion in emergency funding to aid recovery efforts for the recent deadly storms that ravaged...

    Stock

    One hallmark of secular bull markets is rotation. When leading stocks, sectors, and industry groups falter, there needs to be others that grab the...

    Latest News

    Vice President Kamala Harris spent a whopping $1.5 billion during her 15-week campaign that ended in defeat to President-elect Donald Trump, including burning through...

    Latest News

    Activists on Saturday demanded that the state of California pay millions of dollars to each Black resident in reparations as a way to make...



    Disclaimer: Frequencytraders.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Frequencytraders.com