Percentage Of Stocks Over The 50dma

 Here is the continuation of a project I started a couple of weeks ago, a historical study of the percentage of stocks above the 50dma. Stockcharts.com has data going back only 10 years, and last week I looked at the period 2002-2004. This week is 2005-2007, the end of the bull market. Here is the NYSE, which, during this period, was significantly stronger than the Nasdaq, which may have been an indication the bull market was coming to an end. However, on this chart you really don't see it. 

Here on the Nasdaq is where you see it. Notice that the moving averages peaked in early 2006, a strong indication that this was weakening. I don't have similar data for the Russell 2000, but I will bet it was even weaker going into the end of 2007. Unfortunately, this only told you the market was weakening, it does.t tell you how far it will go down. Over time, this is proving to be an extremely reliable indicator of market strength and weakness.