A Snapshot of Moving Averages

 
View from the Observation Deck
  1. In today's post, we are showing the percentage of stocks in some major U.S. stock indices that are trading above their respective 50-Day and 200-Day moving averages.
  2. Moving averages tend to smooth out day-to-day price fluctuations and can be a useful tool for traders to identify both positive trends and reversals, in our opinion.
  3. On 8/12/19, the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices closed 4.72%, 8.65% and 16.18%, respectively, below their all-time highs, according to Bloomberg.
  4. The percentage of stocks in the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices trading above their 50-Day moving averages on 8/12/19 were 36%, 36% and 39%, respectively.
  5. The percentage of stocks in the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices trading above their 200-Day moving averages on 8/12/19 were 54%, 44% and 42%, respectively.
  6. The percentage of stocks trading above their 50-Day moving average by S&P 500 sector ranged from 18% (Energy) to 57% (Utilities).
  7. The percentage of stocks trading above their 200-Day moving average by S&P 500 sector ranged from 21% (Energy) to 79% (Utilities).
  8. Sell-offs in the broader major stock indices, like what has transpired over the past two weeks, can provide some opportune entry points into the market for those willing to act, in our opinion.
This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance, while the 11 major S&P 500 Sector Indices (Real Estate was added as the 11th major sector in 2016 but data is not available for this chart) are capitalization-weighted and comprised of S&P 500 constituents representing a specific sector. The S&P MidCap 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The S&P SmallCap 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization.

Download a PDF of this post, please click here.
Posted on Tuesday, August 13, 2019 @ 2:17 PM

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.