Chart of the Day - Monday, June 13, 2023

The S&P 500 Percentage of stocks above its 20-day moving average is now just eclipsing the 80% level.

While it indicates risk/reward on the rally is diminishing, it can remain elevated for weeks.
$SPY pic.twitter.com/XM5at0jrSz

— Matthew Timpane, CMT (@mtimpane) June 13, 2023

Today’s Chart of the Day was shared by Matthew Timpane (@mtimpane). The chart shows the percentage of S&P 500 stocks above their 20-day moving average (over the past year), with the S&P 500 in the lower panel. Matthew points out that, as of today's close, 82% of S&P 500 stocks are above their 20-day moving average. While short-term breadth is reaching overbought levels (above 80%), long-term breadth is just starting to return to healthy levels (above 50%). 64% of S&P 500 stocks are above their 50-day moving average, and 61% are above their 200-day moving average. Risk/reward is diminishing in the near term, but it's hard to view this as bearish. If anything, bulls should embrace this, considering that everyone was losing their minds over weak breadth and narrow participation just a couple of weeks ago.