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Thursday, April 25, 2013

NYSE bullish percent indicator

I mentioned the other day that a lot of indexes are lagging behind SPX now.  I think this chart of the NYSE bullish percent indicator shows the picture pretty clearly.

This indicator dropped rather sharply on the last pullback.  I marked the peaks of this indicator against SPX for the last couple of years.  It appears to have peaked out in Feb./March just like it did in 2011 and 2012.  It looks like a dead ringer to last year at this time right before the correction really got going.  Is that a fluke or is history about to repeat?  In order to sustain an uptrend over the summer without a correction I think more stocks will have to participate.  That would turn this indicator up again.  A failure to get renewed strength most likely means the late spring drop is going to happen yet again.  If that is the case keep in mind that margin debt is higher then it was in the other spring corrections.  That adds to the downside risk.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.