The S&P 500 index is holding up well as it is only 1.89% below its all-time high; however, when we take a closer look at the individual stocks, we can see that they have begun to dip below 4 key timeframe highs that we have identified as important.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's first break down what the chart shows:
The blue line in the top panel shows the price of the S&P 500 index.
In the bottom panel:
In black is the % of S&P 500 stocks that are above their 2018 highest high
In blue is the % of S&P 500 stocks that are above their 2021 highest high
In gray is the % of S&P 500 stocks that are above their December 2023 highest high
In red is the % of S&P 500 stocks that are above their 2024 Q1 highest high
The Takeaway: This chart is a great way to visualize the current market environment and track what's happening beneath the surface.
What stood out most for me was that MORE than 50% of stocks in the S&P 500 are below their December 2023 highest high and 2024 Q1 highest high.
This is yet another data point that I will categorize as somewhat bearish.
I find myself repeating this, but it’s important to note that a short-term correction at this stage would not be surprising if the bulls fail to regain control.
Do you think the environment has changed? Or could this simply be another stealth correction similar to what we’ve seen in the past?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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