Right now the amount of stocks above their 200 day moving average are at their highest point since 2006. The only other period there has been more bullishness since this indicator has been tracked is the 2003-2004 time frame (not seen here). The fact that this many stocks have risen above this key moving average is very bullish for the market going forward, however I’m afraid that we’ve come a little too far too fast. We are in dire need of a decent pullback to curb the high level of bullishness.
One final note is on the RSI and you can see that this entire bear market we’ve mostly stayed within the 20-60 point range. Right now we’re a tad above it around 61, but I suspect during the coming pullback we’ll trade down around the 50 range, and then build momentum for a decent upside break.
