Tuesday, April 17, 2007

S&P 500 vs S&P 500 Bullish Percent chart / Minyanville

click on the headline to read the "4 other things you need to know"

bitte auf die ├╝berschrift klicken um die 4 anderen wissenswerten dinge zu erfahren The S&P 500 is now at its highest since 2000. Ow! Someone just fired a champagne cork at us.

Anyway, below we take a look at the S&P 500 with the S&P 500 Bullish Percent chart overlaid behind it.

  • The decline in February occurred shortly after the bullish percent index reached 80%, a very high-risk level.

  • What is important here, however, is that the S&P 500 is now breaking above the February high, while the S&P 500 Bullish Percent is well below February levels.

  • This is a negative divergence.

  • In a nutshell, it means that fewer S&P 500 stocks are accounting for this move higher and participating in the bullish party.

  • Fewer participants means a more vulnerable index.

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