A good analyst/money manager knows which way the tide is shifting. A great one knows why.
There are dozens of useful indicators available to you on the platform, each providing a unique look into the health of different asset groups, sectors, etc. However, most of the time when the analyst team refers to indicators, they are pointing to one of three different measurements: the Ten Week (measures the percentage of stocks trading above their 10-week moving average- short term,) Bullish Percent (measures the percentage of stocks trading on a PnF buy signal- intermediate term) and Positive Trend (measures the percentage of stocks trading in a positive trend- long term.) Said plainly, follow through from indicator to indicator is the name of the game when it comes to figuring out that “why” question we all search for.
To start with the near-term indicator, ^TWSPX moved lower on its default chart following Friday’s exhale to a chart reading of 72%, suggesting just over seven of every ten S&P 500 stocks trade above their 50-day moving average. While we don’t think about support/resistance for indicators in the same form as we do for traditional trend charts for stocks and funds, the lack of market interest to send this reading above 80% in 2025 is at least conversationally interesting. While a reversal lower here might seem daunting, some further context can help provide insight into how exactly we should play markets as we look to challenge all time highs above. The first point is worth mentioning in tandem with our commentary on ^TWSPX- remember, this value can safely decline as old, lower values fall off 10-week moving averages, normalizing through time rather than price. This provides a near-term path forward without such a perilous decline but regardless the slowdown in near-term breadth should be monitored. .
The other idea pointing to perhaps a simple normalization through time is the positioning of other indicators on the site, namely ^PTSPX which suggests roughly two-thirds of S&P 500 stocks lie in a positive trend. While this value is still a ways away from 2024 highs, it does establish a new 2025 high watermark and gives support to the longer-term strength of the domestic space as we enter the back half of the year. While ^BPSPX did reverse down at the start of June, it has yet to see any further deterioration, another sign that the reversal was simply indicative of a strong market taking a pause.
All this to say, watching the indicators can play a valuable role in keeping up with how markets move. It goes without saying that participation and performance don’t always go hand in hand, a point to watch if we do see a disconnect in the future. Regardless, consider setting alerts for a handful of indicators to keep in touch with what markets are telling you.
