The Stock Trends NYSE Bull/Bear Ratio has turned bullish. Growing investor confidence is apt to push U.S. equities even higher in 2012.
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Notes of bullishness are ringing louder for U.S. equities. A market rally generally adds to investor confidence, and the already generous 8 percent move in the S&P 500 index since the beginning of the year has market prognosticators looking for more. Adding to this awakening is the uptick in our Stock Trends NYSE Bull/Bear Ratio which is now reading positive for the first time since a bearish grip took hold of the market again in the summer of last year.
Since the beginning of the year the number of strong Bullish (
 ) stocks has increased from 25 per cent of trending NYSE stocks to the current 44 per cent. Strong Bearish ( ) NYSE stocks have dropped from 51 per cent to 13 per cent. The Bull/Bear Ratio includes both strong and Weak Bullish/Bearish stocks – the ratio of NYSE stocks in a Bullish category ( , or  ) to NYSE stocks in a Bearish category ( , or  ) has risen to 1.03 from 0.43 at the end of 2011. This signals a new period of bullish breadth for the Big Board.For more conservative market-timing investors this Bullish turn in the distribution of Stock Trends indicators delivers a fresh opportunity to increase their exposure to U.S. equities. Past bullish readings of the Stock Trends Bull/Bear Ratio are fairly supportive of confidence in this signal.
The last two periods of a positive (above 1.00) Stock Trends Bull/Bear Ratio on the NYSE have correlated with the following returns when measuring the S&P 500 index from the date of the positive signal for the ratio to the date of the return of the Stock Trends Bull/Bear Ratio below 1.00, signalling a Bearish trend distribution.
The current bullish reading of the Stock Trends Bull/Bear Ratio confirms that the market foundation is in place for more gains this year. |
Published in Stock Trends