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A healthy and robust bull market in the general indexes, such as the S&P 500, is characterized and support by most stocks trading above their own 200-day Simple Moving Average (200d SMA).
Here, I look at the stocks in the S&P 500 above their 200d SMA: the SPXAR200.
Figure 1. Percent of Stocks in the S&P500 above their 200-day Simple Moving Average (SPXAR200) since 2001
Data for this indicator is available since late-2001. Starting with the 2003 low and subsequent bull market into 2007, I find that this indicator rallied strongly after a significant market low was put in. The red, green, and orange boxes are all of similar width (timespan) and show how in 2003, 2009, late 2011, early 2016 and early 2019, the SPXAR200 surged to at least the mid-50s and mostly back above its long-term moving average (blue line).
Currently, this has not (yet) happened. The only comparable period is the late-2015 bounce, where the SPXAR200 faltered at around 50, and the market fell back along with it. The SPXAR200 stands currently at a paltry 32 and is still well-blow its long-term average. Besides, notice how the long-term average has been in decline since 2015: fewer and fewer stocks have been on average above their 200d SMA. Hence, unless this indicator starts moving higher soon, the lack of stocks above their 200d SMA in the S&P 500 remains a concern for the bulls' staying power.
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