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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (59355)	5/24/2024 4:35:14 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69835

Watch out for this ‘contrarian’ sell signal for stocks, says Bank of AmericaPublished: May 24, 2024 at 9:53 a.m. ET By Barbara KollmeyerFollow comments 11 The market could be nearing a tipping point, warns Bank of America. GETTY IMAGES Email icon Facebook icon Twitter icon Linkedin icon Flipboard icon Print icon Resize icon Referenced Symbols ACWI +0.65% DJIA +0.01% SPX +0.70% COMP 1.10% NVDA +2.57% MSFT +0.74% Listen to article Length2 minutes Investors should be on the lookout for this “contrarian” sell signal that could be hinting that the stock market is close to hitting a wall. That’s according to a team of strategists at Bank of America led by Michael Hartnett who say there has been a shift toward the bank’s so-called global breadth rule. That guideline stipulates that a contrarian sell signal is triggered when a net 88% of equity indexes in the MSCI All Country World Index ACWI, which tracks 3,000 stocks in 47 developed and emerging market countries, are trading above their 200-day and 50-day moving averages. That percentage stands at 71.1% currently, Hartnett and his team said in a note to clients on Friday. Advertisement Chart showing the 50 and 100-day simple moving averages for the MSCI All Country World Index. BIG CHARTS Moving averages are useful in indicating the likely direction for an asset and possible resistance and support levels. The 200-day average gives the average closing price over that period, which is the same for the 50-day. If global breadth is rising, it means that the stock rally that has largely been dominated by tech is broadening out. Stocks stalled on Thursday, with the Dow industrials DJIA suffering the biggest one-day percentage decline since March. The index is up 3.6% so far this year, while the S&P 500 SPX is up 10% and the Nasdaq Composite COMP is up 11%. Hartnett and his team noted that outside of the “Magnificent Seven” tech stocks — Nvidia Corp. NVDA, +2.57%, Microsoft Corp. MSFT, +0.74%, Apple Inc. AAPL, +1.66%, Meta Platforms Inc. META, +2.67%, Alphabet Inc. GOOGL, +0.83%, Amazon.com Inc. AMZN, -0.17% and Tesla Inc. TSLA, +3.17% — the biggest winners this year have been cryptocurrencies, China and commodities GC00, -0.06% SI00, 0.30%. The 30-year Treasury BX:TMUBMUSD30Y has been the biggest loser. Commodities are on course to be the best-performing asset class in three of the past years the analysts noted. Read: What record highs for gold, silver and copper are saying about the economy Advertisement Read Next Dow transportation stocks are ‘area of potential concern’ for stock-market bulls More On MarketWatch Barron's: The Real Reason Nvidia Hiked Its Dividend 150% Dow falls out of bed. Why stocks were vulnerable to a pullback after new highs. Barron's: These Stocks Moved the Most Today: Deckers Outdoor, Intuit, Workday, Ross Stores, Nvidia, Guardant Health, and More Why gold and silver fell for a third day in a row About the Author Barbara Kollmeyer Barbara Kollmeyer is based in Madrid, where she leads MarketWatch's pre-markets coverage of financial markets and writes the Need to Know column. She has worked in London and Los Angeles for MarketWatch previously. Follow her on Twitter @bkollmeyer. Partner Center ADVERTISEMENT ADVERTISEMENT BACK TO TOP Copyright © 2024 MarketWatch, Inc. All rights reserved. Terms of Use \| Privacy Notice \| Cookie Notice Facebook Twitter Linkedin Intraday Data provided by FACTSET and subject to terms of use. Historical and current end-of-day data provided by FACTSET. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.