Chart of the Day - Tuesday, October 22nd, 2019

Today’s Chart of the Day was shared on Twitter by @sentimentrader. It's a chart of the German DAX index. In the bottom pane of the chart is a breadth indicator showing the percentage of stocks within the DAX that are trading above their 200-day moving average. Sentimentrader points out that breadth is improving with the indicator reaching 76% for the first time in two years. Respected Technician, Bob Farrell once said: "Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names."  The DAX closed at a 52-week high today and the fact that we're seeing broad participation from the individual components within the index suggests it has further upside from here. Sentimentrader adds this interesting stat: When the % of stocks above their 200-day moving average rose above 76% for the first time in 100+ days, $DAX was higher 100% of the time 6-12 months later.