In this video I show how technical analysis indicators that measure the number of stocks above their various moving averages are giving a big warning sign when it comes to the current market rally. You can see what I mean in this chart.
Notice how the moving averages on this chart have been going down since the start of this year and went down last week, even though the S&P 500 made a new 52-week high. That means more stocks were actually falling than going up even though the S&P 500 went higher!
Stocks such as NVDA, META, and IBM are helping to push the market averages up in the past two weeks, because they heavily weight the S&P 500 and Nasdaq with their giant market caps, while many stocks actually have been trading down. This is a bigger problem than a market being “overbought” as we saw at the start of 2024, but does it matter?
-Mike
