“Where breadth goes, the market usually follows,” goes an old market saying. Breadth indicators are useful tools to assess the inner workings of the market’s rallies or corrections, and are used to identify strength or weakness behind market moves, i.e. to assess how the bulls and the bears are exerting themselves.
First, a quick review of the stock market scoreboard. The MSCI World Index and the MSCI Emerging Markets Index have declined by 4,8% and 6,7% respectively since the highs of January 11. Following its sharpest three-day decline since March last week, the S&P 500 Index is down by 4.7% since the peak of January 19, the Dow Jones Industrial Index 4.9%, the Nasdaq Composite Index 4.7% and the Russell 2000 Index 4.8%. After yesterday’s bounce from short-term oversold levels, US stock market futures and foreign bourses are heading down again.
The major moving-average levels for the benchmark US indices, the BRIC countries and South Africa (where I am based in Cape Town when not travelling) are given in the table below. With the exception of the Russell 2000 Index and the Russian Trading System Index, the indices in the table are all trading below their 50-day moving averages. The S&P 500 Index is threatening to break below its December low of 1,092 and also to breach an upward sloping trend line that extends from the August lows. A decline below these support levels could signal a deeper pullback.
Although at this juncture all the indices are still trading above the key 200-day moving averages - an indicator of the primary trend - one should keep a close eye on these important levels. (The Shanghai Composite is a mere 64 points away from its 200 DMA as I am writing this post.)
Click here or on the table below for a larger image.

Back to market internals: The number of NYSE stocks trading above their respective 50-day moving averages has declined to 49.7% from 86.2% at the beginning of January (see top chart below). In order to be bullish about the secondary or intermediate trend, one would expect the majority of stocks to trade above the 50-day line. Based on this indicator, and also the 50-day moving average of the S&P 500 Index itself, the intermediate trend may be in the process of turning down, but a few days are needed to confirm the breaks.
For a primary uptrend to be in place, the bulk of the index constituents also need to trade above their 200-day averages. The number at the moment is 82.5% - somewhat down from its early January high of 88.7%, but nevertheless still firmly in bullish territory (see bottom chart below).

Source: StockCharts.com

Source: StockCharts.com
Also focusing on the short-term technical picture of the S&P 500 Index, Adam Hewison (INO.com) provides a brief analysis advocating that one should be out of the market at the moment. Click here to access the presentation. (The analysis was done on Friday morning, but is still as relevant today as it was a few days ago.)

It goes without saying that the strong rally since March is bound to be followed by a correction at some stage. We are about to find out whether this is the moment. In the meantime, be cautious out there.
Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.
Did you like this article?
We do not just look at our
Christian Louboutin C'est
Christian Louboutin Simple Black White boots
2010 New Style christian louboutin shoes
UK Links of London On Sale,
Bruno Troublé, the
I'm a little late finding
I'm a little late finding this article, but I loved it.
Do you love sports, do you feel like to look cool, i got a very awesome website here introduced by one of my friends. Very good website where you can find the Authentic nike shoes with latest and huge style of nike air max shoes and dunk sb shoes. I have bought from them for so many times, and very satisfied with the their goods and service.Such as Air max 1, air max 2, air max 90, nike air max 2009+, air max 2010 new, nike air max TN, nike air ltd trainers, air max 95.Air max 360 running shoes, nike shox shoes. Though their price are low, don't worry about it's quality.
Christmas is coming, go there to find presents for your friends or family. They are on sale, limited time!
http://www.discountcoachhandb
ugg boots christian
ugg boots christian louboutin louboutin lv bags louis vuitton handbags louis vuitton lv handbags mbt shoes christian louboutin chanel bags cheap chanel bags discount chanel bags chanel bags sale christian louboutin cheap christian louboutin discount christian louboutin christian louboutin sale gucci bags cheap gucci bags discount gucci bags gucci bags sale dg bags cheap dg bags discount dg bags dg bags sale dior bags cheap dior bags discount dior bags dior bags sale coach bags cheap coach bags discount coach bags coach bags sale chloe bags cheap chloe bags discount chloe bags chloe bags sale prada bags cheap prada bags discount prada bags prada bags sale fendi bags cheap fendi bags discount fendi bags fendi bags sale hermes bags cheap hermes bags discount hermes bags hermes bags sale miu miu bags cheap miu miu bags discount miu miu bags miu miu bags sale marc jacobs bags cheap marc jacobs bags discount marc jacobs bags marc jacobs bags sale marni bags cheap marni bags discount marni bags marni bags sale loewe bags cheap loewe bags discount loewe bags loewe bags sale
MKV Converter can help you
MKV Converter can help you to convert MKV files to the formats fitting for your portable players.
MKV Converter for Mac is easy-to-use Mac MKV Converter, helps you enjoy MKV video files on all top portable player, such as iPod, iPhone, Zune, PSP, and other MP4 Player etc.
--------------------------------------------------
MKV Video Converter * Mac MKV Converter Bluray To MP4 * MKV Converter * MKV Converter for Mac
global sportlifestyle brand
Under the circumstance of
000-200 000-330 132-S-911 156
642-974 642-481 646-046 1z0-0
Cheap Wedding Dresses Cheap
RM Converter for Mac can
RM Converter for Mac can convert rm, rmvb to mp4, mov, mpg, mpeg, flv, mkv, avi on Mac OS X.
Mac RMVB Converter supports to read, convert and edit .rm files in an easy and simple way. It can convert .rm to avi, mpg, mov, mp4, m4v, flv, 3gp, mp3, flac and AAC etc. with so much video/audio file can be written, there is no doubt they’ll work smoothly in your portable player, handheld computer and home network.
-----------------------
RM Converter || RM Converter for Mac || RM to WMV for Mac || Convert RM To iPod Mac || MKV Converter
lebron james shoes nike
Convert video to Sony
Once Cindy was rescued, Bill
Acai Berry | Acai | Acai
costume jewelry wholesale
MP3 TO RM Converter Batch
-----------------------
RM Converter || RM Converter for Mac || MKV Converter || Video To RM Converter || AVI To RM ||
FLV Converter Video DVD
This article is written