BUZZ-S&P 500 vs 200-DMA still a key sign post

Tue Dec 1, 2015 9:37am EST
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** The Nasdaq 100 is flirting with new highs, but the S&P 500 vs 200-DMA likely more significant for market's direction from here on

** Recovery off summer/fall lows has been concentrated and narrow with large-cap tech leading way higher

** That said, recent rally off mid-Nov lows has seen some broadening, including modest turn higher in Russell 2000 / Russell 1000 ratio as small-caps see some seasonal bargain-hunting

** Market internals such as advance/decline lines and new high/new low ratios have ticked up, although absolute levels remain tempered

** SPX reclaimed 200-DMA, now 2065.18, on Nov 18, and still has potential to exceed its May high. Chart:

** From 2012 to 2014 SPX V-bottom reversals back over its 200-DMA led to new highs without index first closing back under it

** Last 2 instances in summer/fall 2015, however, have not led to new highs

** Nevertheless, with SPX above key long-term MA, there is still potential to move closer to disparity resistance line which would allow for an index close in 2140 area

** SPX closes below 200-DMA will damage bull prospects and re-threaten key support at 2017.22 (Messaging: