Is there an environment shift underway?

This is an important chart! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­  

Thursday, December 19, 2024 JC here.   It's the last day of guest posts from each of the members of the All Star Charts research team. I'll be back at my desk later this afternoon.   Today's post is from Grant Hawkridge. Is There an Environment Shift Underway? G'day everyone!    Most of you already know me, but for those who don't, my name is Grant. I'm the Aussie component of All Star Charts.    JC and Steve found me lurking on Twitter, where I was sharing my insights through charts eerily in the same style as JC while I lived in Europe. That was over four years ago… wow time flies.   I am best known as the in-house Quantitative Strategist. I do the heavy number crunching and then present the data in a visually appealing way to tell the story.     When I'm not crunching numbers, you can find me enjoying a whiskey down at the golf course.   However, before I head to the golf course, I send a note highlighting my top data point each market day. It's called The Daily Number. It's one number in one minute or less.   By the way, my daily note is free, and you can sign up here.   What's more important is that I wanted to share yesterday's note with all of you.    I believe it's an important one!   (Keep in mind, this was written before Wednesday's big red day. So we've already had our bearish ears perked up.)   -----   Today's number is… 37.3 > 34.3   More S&P 500 stocks are in downtrends than uptrends.   37.3% are in downtrends… and 34.3% are in uptrends.   Has the environment switched? Maybe.   Here is the chart:   (right-click and open image in new tab to zoom in)   Let's first break down what the chart shows:   The blue line in the top panel shows the price of the S&P 500 index.   In green is the % of S&P 500 stocks above both their 200-day and their 50-day moving averages, indicating a longer-term uptrend.   In yellow is the % of S&P 500 stocks above their 200-day but below their 50-day moving averages. This indicates a longer-term uptrend but a short-term mess.   In red is the % of S&P 500 stocks below their 200-day and below their 50-day moving averages, indicating a longer-term downtrend.   The Takeaway: This chart is a great way to visualize the current market environment and track trends beneath the surface.   Currently, over one-third of S&P 500 stocks are in a downtrend. The last time we observed the number of stocks experiencing downtrends outnumbering those in uptrends was on May 29 of this year. This lasted only one day and occurred when the S&P 500 index was near all-time highs; afterwards, the market continued to march higher.   We haven't observed this many stocks in the S&P 500 in a downtrend since November 13 last year. My main concern is whether this change in the market environment will continue over a longer period, unlike what we experienced in May.   Will this environment change stick? I have no idea… I don't own a crystal ball. But this is why it's so important to adapt to changing markets.    The way I learnt it was to leave your confirmation bias at the door!   Do you think the environment is changing?   Let me know!   JC will be hosting our next LIVE video conference call this Monday 12/23 exclusively for Premium Members of ASC Research. If you're already a member, then I'll see you there!   If you're not yet a Premium Member of ASC Research, you can CLICK HERE so you can join us on Monday's LIVE Conference Call, access all the trade ideas through our proprietary Rangefinder App, and receive all the daily premium research right in your inbox.   Join ASC Premium Risk Free   Thank you for taking the time to read my note.   - Grant Hawkridge   What Do We Do If The Market Does Change? That's the question Sean will be answering in today's free All Star Options live event at 2:00 pm ET.    If you're wondering which options strategies to deploy in a bear market, or in a maturing bull market, or even in a sideways market, Sean has you covered.   Save your spot here.   Grant Hawkridge | Chief Aussie Operator, All Star Charts All Star Charts emails are a financial publication of general circulation and only offers impersonal advice, not tailored to individual needs of a specific client or group. Any comments or statements made herein do not necessarily reflect those of All Star Charts or its affiliates (collectively, "All Star Charts") and do not constitute buy or sell recommendations. Unless specifically indicated, this message is not an official confirmation of any transaction. The contents of any email communications to or from All Star Charts may be monitored or reviewed at All Star Charts's discretion. 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