With the market’s decline over the past week our longer term survey (200 day moving average evaluation) worsened with the long term trend of the market close to being downgraded another notch from neutral-bearish to bearish. Our more sensitive MATA survey fell meaningful from the prior week which pushed it deeper into bearish territory. Unless the market stabilizes soon we are likely to see the long term trend (200d survey) downgraded another level to bearish.
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200 Day Moving Average Evaluation
As shown in the table below, the net percentage of stocks that are in long term uptrends decreased the prior week from 52% to 50.1% while the percentage of stocks in downtrends increased from 48% to 49%. The decline to 50.1% puts the market’s long term trend in jeopardy of being downgraded another level if it falls below 50%. In terms of sectors, the utility sector takes the top spot as the percentage of its members in uptrends increased to 78% while the health care sector takes the second spot with its 62% reading. The absolute worst sector remains energy with only 9% of its members in long term bullish trends. Given energy represents 11.3% of the S&P 500, its weakness is weighing on the S&P 500 and offsetting some of the improvement in utility and health care sectors.
Classifying the four categories for the survey in terms of seasons helps to gauge the market’s maturity. This bull market remains to be dominated by the early bull market (AF, Spring) and late bull market (AR, Summer) categories, indicating the age of this bull market remains young as late bull markets have the AR categories dominating with more stocks also residing in the early bear market (BR, Fall) category.
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