Yesterday’s crash brought the number of stocks above their 50 day moving average at the NYSE to just 26%. This has proven to be a relatively reliable buy indicator in each of the last three market sell-offs. However, a longer perspective shows that this indicator fell much farther in the 5 sell-offs that resulted during the credit crisis. Is this sell-off just another hiccup during the continuing bull market or this is truly a return of the credit crisis and just the beginning of another brutal sell-off?
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.