Traders and investors managed to withhold heavy sales at the end of the summer, but most stocks show that they are slowly moving into negative territory.
Although the SP500 fell only by 1.7% from its monthly peak, the index managed to move below its 50-period moving average. If we looking more close, a month ago, 75% of the shares in the index were over their 50 period SMA, and today only 45% of the shares in the index managed to stay above it. The gradual deterioration in assets signals that negativism is increasing and, before the next upward wave, stocks are likely to continue downwards from now on in the short term.
Meanwhile, the number of SP500 shares that mark new 52-week bottoms is rising. At present, this figure is at the levels of the beginning of 2016, when the shares were subject to a strong sale.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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