Chart of the Day - Wednesday, August 21st 2019

Today's Chart of the Day was shared on Twitter by Neil Blalock (@NeilBlalock). It's a chart of the percentage of stocks in the S&P 500 trading above their 200-day moving average. Neil points out that in the past two cyclical bear markets, (2015-2016 and Q4 2018) this indicator fell below 50% and stayed there until the market was able to resume its uptrend. On the other hand, in periods where the market was moving higher, this indicator held above 50%. Even during pullbacks like the one we saw in May, it remained above 50% and the S&P 500 went on to make all-time highs.  The current reading is around 57%. Clearly, 50% is an important line in the sand for this breadth indicator and bulls will need it to hold in order for the market to move higher. You can track this indicator on StockCharts.com using the symbol $SPXA200R.