The S&P 500 Market Components trending

Out of the 500 stocks in the S&P 500, currently 352 stocks are trading below their 200-day simple moving average (SMA).

And 405 stocks are trading below their 50-day SMA.

When I had last checked 3 days back the situation was worse but not by much.

The earnings releases have been OK but remember that they are OK based on reduced expectations. Most companies (including AMD from yesterday) are talking about future uncertainty and painting a picture that tells me future earnings expectations will be lowered. And if that starts to happen (it is already happening), then stocks will trade lower in anticipation of that eventuality.

Looking at the “Magnificent 7” that has driven the market in a big way this year.

Only 2 of the 7 are trending bullish at this time. I add FNGS as the ticker that encapsulates close to the average of these stocks. Here is the full composition of FNGS:

More information on this instrument can be found here.

The S&P 500 (SPY) is up the last 2 trading days but is down 8 of the last 11 trading days. So, sentiment is low, and the trend is bearish. We may get up days from time to time. But it still looks like going lower.

Strategy:

Trade with caution and stay disciplined to the trending.