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Wednesday, September 12, 2018 8:50:02 AM
Semis vs S&P 500: % of Stocks Above 50-DMA
By: Bespoke Investment Group | September 12, 2018
It’s official. Everybody now hates the semis. Semis have been under a decent amount of pressure for several weeks now. Most recently, in our “Back to School” checkup of S&P 500 industries in last week’s Bespoke Report, we noted that “Semiconductors have relinquished their position at the top. While semis made a marginal new high in early June, it has been a cold summer for the group as it increasingly shows signs of rolling over.” The pain for the sector this week has continued and just this morning both Goldman Sachs and Stifel have joined in the chorus of sell-side firms with nothing good to say about the group.
Like we mentioned on Friday, the weakness in the semis is nothing new. The chart below compares the percentage of stocks trading above their 50-day moving average (DMA) in the S&P 500 and the Philly Semiconductor Index (SOX). For the semis, the percentage of stocks above their 50-DMA saw its most recent peak in early June at 93% and has been making lower highs ever since. Heading into today, the percentage reading for the SOX stands at just 27%. For the S&P 500, it’s a different story as two-thirds of stocks in the index are currently above their 50-DMA.
Semis are often considered a leading indicator for the market as a whole, but looking at the chart, two periods of similar divergence that stand out are back in late December and in early July. In December, the weakness in semis did a great job of anticipating the weakness in the broader market, but more recently the divergence in early July turned out to be a false alarm as the S&P 500 rallied over 6% from the close on 7/3 through yesterday.
https://www.bespokepremium.com/morning-lineup/bespoke-morning-lineup-2/
• DiscoverGold
By: Bespoke Investment Group | September 12, 2018
It’s official. Everybody now hates the semis. Semis have been under a decent amount of pressure for several weeks now. Most recently, in our “Back to School” checkup of S&P 500 industries in last week’s Bespoke Report, we noted that “Semiconductors have relinquished their position at the top. While semis made a marginal new high in early June, it has been a cold summer for the group as it increasingly shows signs of rolling over.” The pain for the sector this week has continued and just this morning both Goldman Sachs and Stifel have joined in the chorus of sell-side firms with nothing good to say about the group.
Like we mentioned on Friday, the weakness in the semis is nothing new. The chart below compares the percentage of stocks trading above their 50-day moving average (DMA) in the S&P 500 and the Philly Semiconductor Index (SOX). For the semis, the percentage of stocks above their 50-DMA saw its most recent peak in early June at 93% and has been making lower highs ever since. Heading into today, the percentage reading for the SOX stands at just 27%. For the S&P 500, it’s a different story as two-thirds of stocks in the index are currently above their 50-DMA.
Semis are often considered a leading indicator for the market as a whole, but looking at the chart, two periods of similar divergence that stand out are back in late December and in early July. In December, the weakness in semis did a great job of anticipating the weakness in the broader market, but more recently the divergence in early July turned out to be a false alarm as the S&P 500 rallied over 6% from the close on 7/3 through yesterday.
https://www.bespokepremium.com/morning-lineup/bespoke-morning-lineup-2/
• DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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