Stock Market Scout acts as a quick guide to where the market stands from a technical analysis standpoint. Since it is based on historical data is works as a lagging indicator. Coupled with Stock Market Levels it can provide guidelines to market turning points where buying PUTS and CALLS at extremes can act as insurance or a low risk entry into the market.
The percentage of stocks over the 50 day moving average is starting to reach a sell zone. Typically this means we will either see the overall market starting to trend down, or rotations into other sectors that have not be part of the overall rally.
Timing the market is more of an art than a science. We have worked on our Stock Market Timing Model over the years. It was originally based Martin Zweig’s Four Percent Model. Like any timing models there are whip-saws and good and not so good times. Overall Stock Market Scout has been a good guide to market trends. (recent screen shot).