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Renewed fears about the global economy have pushed over 50% of large cap stocks below their 200-day moving averages, a level of gloom not seen in over a year. This is evident in the chart below, which shows that only 45% of S&P 500 stocks are above their 200-day average price.

Bulls do well when volatility is low or declining, and this is not what we have today. According to the chart, we need to see 70% or more of S&P 500 stocks trading above their 200-dma to create the low-volatility conditions that bull markets are made of.


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