On January 22, 2008 the S&P 500 Index seems to have established a market bottom, at least on an interim basis. At this same point in time, the percentage of stocks trading above their 200 day moving average hit a low of approximately 15%. Since late January, the percentage of stocks trading above their 200 day MA has trended higher to 23%. In addition to an increase in this moving average percentage, the S&P 500 Index has trended higher as well. A chart of each one of these indices is detailed below.
(click on charts for larger image)
Many market technicians believe there is a high likelihood the S&P 500 Index will retest the January low. From a contrarian perspective, if the consensus believes in this retest, maybe it will not occur.