Hold Off Buying Until the S&P 500 Indicator Turns Bullish

When 50% of the S&P 500 Stocks Are Above Their 50‑Day SMA… It’s a Green Light

Think of the 50‑day moving average (SMA) as the market’s “golden gate.” If more than half of the S&P 500 clubs it’s on the “golden patio,” a quick look tells you the parade of stocks is strolling, not sprinting to the finish line.

Why 50% Is a Hot Ticket

More than 50% – the market is in the sun, and it’s usually safe to buy in.
Less than 50% – caution. Stocks are rolling in the sand, dropping, or looking for a gravity‑free spin. Long‑term gains feel like a roller‑coaster ride with no souvenir.

Meet Cory Mitchell: The Trend‑Radar Guru

Cory, an analyst over at Trading.biz, keeps his finger on two handy gauges:

All U.S. stocks over 50‑day SMA %
S&P 500 stocks over 50‑day SMA %

When the gauge nudges above 50% and starts to climb, Cory tosses the long‑swing trading flags high. When it dips, he pulls back. Once it stays below 50% for a stretch, he presses pause on buying until the indicator flips back.

Why the “All U.S. Stocks” Gauge Is Fancier

It’s more jittery, like a squirrel on a caffeine buzz. Since February, it has hovered around 50%, rocking in a kind of “meh” choppy swirl. Meanwhile, its cousin—tracking only the S&P 500—held above 50% from November to April 24, holding the line. The split timing shows a bunch of stocks weren’t playing ball in the S&P rally, hinting at some under‑the–hood weakness.

It Won’t Pinpoint the Exact Wiggly Tops & Bottoms

Think of it as a wide‑angle lens: it captures the whole mountain range, giving you a sense of the overall direction but not the exact crags and cliffs. When most stocks are jittery or on the way down, the gauge says “stay safe, stay cautious.”

In a Nutshell (and a Nicer Chart)

Below is a quick rundown of the SPDR S&P 500 Trust (SPY) paired side‑by‑side with the 50‑day SMA exceedance percentage. Spot the patterns and decide when to buckle up or hold back.

(A visual illustration would sit here, showing SPY’s price edges against the ‘% of S&P 500 above 50‑Day SMA’ line.)

Quick Take on the 50‑Line Roller Coaster

On April 24, the indicator dipped below the 50 % line for the first time since it broke out in November 2023. In plain English: more than half of the market charts are trending down in the short‑term, so if you’re a swing trader, it might be wise to hold off on buying your favorite stocks until that line flips back above 50.

How I (Cory Mitchell) Keep Things Moving

Below 50 %: No new long positions.
Crosses back over 50 % from below: Add a few positions.
Indicator keeps climbing and the stocks you’ve bought are looking solid: Ramp up the size.
When the indicator starts crawling back to 50 % or dips again: pull back or tighten your stops. If the stocks become jittery or turn bearish, consider locking in wins with a tighter trailing stop.
Below 50 % again: pause taking new trades until the line buds into the green zone.

Whiplash and Expectations

The 50‑line can wobble like a shaky tightrope. We don’t know if the rally will feel’s short or linger for months (think August‑October 2023). Either way, the line is a faithful mood‑meter: when it swings high, it’s usually a green flag that the market’s ready to go.