A better way to look at the breath of the S&P 500

For those who know our view points and philosophy, know that we don’t like looking at the same data or indicators as the rest of the investor universe.  While using technical analysis is very helpful, using the same indicators will not generate alpha.  So today we want to look at the iVIEWMarkets Strong Buy to Strong Sell S&P 500 index.  We believe its a more robust way to look at market breath than traditional methods such as advance-decliners or the number of stock above a specific moving average period.

Why We like it:

Each stock must be in the top percentile of strength for a Strong Buy or Strong Sell.  These levels do not move as fast as moving averages and elevate price noise.

How to interpret:

  • Bullish when the Strong buys cross above the Strong Sells
  • Bearish when the Strong Sells cross above the Strong Buys