SPY Percent R Run Still Intact

03/30/2010 12:01 am EST


The S&P 500 Index (SPX) (SPY) has been on a very consistent run for virtually all of the month of March. How consistent? Well, if you take a look at the SPY daily chart below, you can see that we haven't even breached the 80 level on percent R for the last 17 trading days. Normally, we would see "bullish re-tests" of the key 80 level during an uptrend such as this.

What did previous runs of consistent percent R strength bode for the market? Well, I looked back on many years of SPY data going back to 1993 , and the results are not yet conclusive (I'm waiting for the run above 80 to end to garner the most similar data), but it did tend to show that the market would be likely to underperform over the next month compared to an average month in that time frame. Further analysis will be provided (if noteworthy) when we finally do break below 80 on the SPY daily chart.

Click to Enlarge

Also of note on the chart above is that MACD just had a bearish crossover last Friday. You can see that the previous crossover, a bullish one in mid-February, was a nice indicator of market strength ahead.

By Moby Waller of BigTrends.com

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