The chart below reflects the severity of the recent decline, almost all stocks on the NYSE are in major declines. Over the last three weeks we have begun to see some rebound activity as the Percent of Stocks Above the 50 Day MAVG has started to move up off the floor. Unfortunately the Percent of Stocks Above the 200 Day MAVG has barely budged and is flatlined in the 5% zone.
This is options expiration week and we can expect a choppy market, based on the high MCO reading we could expect a bias to the downside. I still expect the major averages to try to test the 200 day moving averages over the next few months. While I expect the trend to be moderately higher, IRA investors should remain in cash.
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