[isatrader]

I showed the Percentage of Stocks above their 20, 50 and 150 day MA line charts in the S&P 500, NYSE and Nasdaq in the free section of the board earlier in the week, and think that they are a good addition to the weekly market breadth update, as they give a good indication of shorter term extremes and reversal points.

As I said earlier in the week, all of the short term indicators (Percentage of Stocks above their 20 day and 50 day MA) had reached the lower zone. This is where you need to watch for a reversal back above the key 30% level, in order to identify the signs of a short term low. Today (Friday) we saw this with most rebounding back above the 30% level, and so it looks as if a short term low may have been established, but it will need to see some follow through at the start of next week for more confirmation.

So imo, the internals continue to suggest that we are in Stage 3, but the index charts are still in Stage 2. And as you know, Stage 3 is a volatile, sideways market phase, and so it will have strong moves in both directions, which could lead to the market going either way i.e. a Stage 2 continuation breakout or a Stage 4 breakdown. So for investor method followers it's a time to be defensive, but for traders there could be opportunities on both sides of the market. Interesting times...