Saturday, June 21, 2008

Market Downtrend Remains In Place

The downtrend in the S&P 500 Index seems to remain firmly in place. This downward move in the market has occurred on increasingly higher volumes as well.

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s&p 500 index chart analysis June 20, 2008
Based on the percentage of stocks trading above their 50 day and 200 day moving averages, extreme oversold levels have not been reached. However, given the strong pullback this past week, a positive bounce in the interim could be realized next week.

(click on chart for larger image)

percentage of S&P 500 stocks trading above 50 day and 200 day moving average June 20, 2008
Lastly, Bespoke Investment Group provided commentary earlier this week on the high level of short interest on the NYSE. Bespoke makes the point in their short interest commentary that this contrary indicator has been less reliable and why. It is worth reading Bespoke's short interest post.

(click on chart for larger image)

NYSE short interest June 20, 2008

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