LIVE MARKETS-S&P 500 index: Can it build back better?

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S&P 500 INDEX: CAN IT BUILD BACK BETTER?

Last Tuesday, the S&P 500 index .SPX ended down about 19% from its record closing high. With this, one measure of internal strength, the percentage of S&P 500 stocks above their 200-day moving average (DMA), fell to its lowest level since around the time of the end of the 2022 bear market, suggesting the benchmark index was potentially washed out to the downside:

The percentage of S&P 500 stocks above their 200-DMA ended at 17.5% last Tuesday, or its lowest level since a 15.9% reading on October 14, 2022, which was just two trading days (tds) after the S&P 500's ended its 2022 bear trend on a closing basis.

With this, the percentage of S&P 500 stocks above their 50-DMA fell to 5.2% last Tuesday, which was also its lowest level since around the time the 2022 bear was concluding.

From last week's lows, the market has bounced sharply. In fact, the SPX has rallied 8.5% over the last four tds, ending Monday down 12% from its record close.

Meanwhile, the percentage of its stocks above their 50- and 200- DMAs have both seen strong thrusts, improving to 25.5% and 30% respectively.

Bulls will want to see strength in these measures continue to build to add confidence in a broad-based recovery from deeply oversold levels, as occurred in the wake of the major S&P 500 troughs in March 2020, October 2022, and October 2023.

This, as the SPX contends with Monday's death cross, an especially strong resistance zone, and a CBOE market volatility index .VIX, which is now around 31, still suggesting elevated uncertainty.

(Terence Gabriel)

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FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

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MORNING BID: TAXES AND TARIFFS ON THE MIND AS RELIEF RALLY LIMPS ALONG - CLICK HERE