Following Friday’s (3/20) the Percent Positive Trend for the NYSE stock universe ([^PTNYSE]) moved to bear confirmed status and fell below 50%.
Last week’s action brought about a fourth consecutive week of negative performance for the S&P 500 Index (SPX) and the majority of U.S. equity indices, apart from the S&P 500 Equal Weight Index (SPXEWI), which declined for the third week in a row. Indicators from the short- to long-term have shown downward movement in response to the weak domestic equity performance. The most notable change following Friday’s (3/20) action came from the Percent Positive Trend for the NYSE stock universe (^PTNYSE), which moved to bear confirmed status and fell below 50%. The indicator now sits at its lowest level since June of last year, suggesting that fewer than half of the 1,800+ stocks in the NYSE universe maintain positive trends on their point & figure charts.
The 50% threshold for the ^PTNYSE is an important line of demarcation, serving as a barometer for broad long‑term market participation. The table below is one that we publish periodically when indicators cross notable thresholds; this edition examines the forward performance of the S&P 500 Index (SPX) following various technical moves within the ^PTNYSE indicator.
Earlier this month, the ^PTNYSE reversed into Os from the upper 50s and remains within the 40%–60% range, where short‑term returns tend to be muted while intermediate‑ to long‑term returns are positive. Forward returns while the indicator is in Os within this range are roughly in-line with returns seen when the indicator is below 50%, but they lag relative to other percentile buckets.
While the ^PTNYSE sits in a middling position on its chart—and when considering the forward returns of the S&P 500—investors should monitor whether the indicator maintains its current range of 40%–60%. As the table shows, forward returns for SPX improve when the indicator moves toward either higher or lower extremes. Elevated readings within the ^PTNYSE indicate a healthy, trending market, and the forward returns within the table support this. Meanwhile, the strongest forward returns tend to follow washed‑out readings below 30%. Current readings are still above that territory, but with the recent move below the 50% threshold, that is now among the next potential developments. Continued readings within the 40%–60% range would point toward more muted short‑ to intermediate‑term forward returns.
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