What’s going to happen next for the U.S. stock market?

The U.S. stock market is reaching a point it may stall at least temporarily.

stock market momentum asymmetric risk reward

The percent of stocks in the S&P 500 index that are above their 50 day moving average has increased to 85%, which I consider a higher risk level in the short term.

$SPXA50R S&P 500 Percent of Stocks Above 50 Day Moving Average

The S&P 500 bullish percent is just over midfield, but it’s usually less responsive than the stocks above their 50 day. That’s because the Bullish Percent is based on Point & Figure buy signals and their default requires around a 10% gain to generate a buy signal.

$BPSPX bullish percent risk indicator

So, I wouldn’t be surprised to see U.S. stocks stall or countertrend reversal down at least temporarily.

From a longer-term observation, the U.S. stock market has recovered just over half the decline from last September. Only time will tell if this is the early stage of a long bear market if it recovers to an all-time new high.

I just make tactical decisions based on the current trends, the likelihood of countertrends, and volatility. We’ve been positioned very well so far in 2019 and capitalized on the panic selling late December.


Mike Shell is the Founder and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of ASYMMETRY® Global Tactical.

The observations shared on this website are for general information only and are not specific advice, research, or buy or sell recommendations for any individual. Investing involves risk including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. Use of this website is subject to its terms and conditions.



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