A Skeptical Look at Recent Bullish Indicators

By on April 25, 2010

Daryl Montgomery analyzes recent bullish signals made popular by Ned Davis and Dan Sullivan. These include Ned Davis’ “breadth thrust” which takes place when more than 90% of stocks are trading over their 50-day moving average. Dan Sullivan bases his bullish outlook on advances versus declines in the market being greater than two to one.

Montgomery admits these indicators have flashed rare buy signals, but the market may have risen so much that they may signal a very overbought market ready to fall.

Source: Seeking Alpha

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