CPI Adjusted S&P 500

As the S&P 500 continues to approach its former all time high, below is a long term chart of the index adjusted for CPI.  While we're not too far from the 2007 highs on a nominal basis, the index is still about 11% lower than it was in 2007 on a CPI adjusted basis and 25% lower than the all time high reached in 2000.  The armchair technician in me has drawn a line to point out that we're approaching inflation adjusted resistance.

Mayan Apocalypse (Cross) Averted

Circling back on a slightly ridiculous market indicator that we had been tracking here: not only was the Mayan Apocalypse averted back in December, but so was the Mayan Apocalypse Cross (which we dubbed a cross over of the 50/200 month moving average).  Thanks to the rally that we've had since November the apocalypse cross never happened.  The 50 month moving average has only crossed below the 200 month twice in the last 100 years, once at the end of the 70s bear market and once in the middle of the depression.

Speaking of moving averages, the 50 and 200 day moving averages have recently crossed for 10 year interest rates.

How Often Does the S&P 500 Trade Below its 50 DMA?

Given the choppy trading environment that we've been going through recently, the S&P 500 is getting closer to trading at its 50 day moving average.  Since the market has generally been up this year, it hasn't spent much time below that mark.  In fact, out of 195 trading days in 2012, the S&P has only spent 45 days or 23% of the time below its 50 day moving average.  How does that compare to history?    In 65 years of history, the S&P trades below its 50 DMA about 37% of the time.  In 1995 there was only 1 day that it was below the average and in 2008 it spent 195 days below it.

50 Month Moving Average Bumping 200 Month Moving Average

Earlier this year I pointed out that the 50 month moving average was approaching the 200 month moving average of the S&P 500.  Fast forward 4 months and the convergence has continued, but the recent rally has served to stave off a crossover for at least the near future.  The death cross, where the 50 day falls below the 200 day is one of the most loathed technical indicators in financial markets.  The monthly crossover (the Mayan-apocalypse cross) has only happened twice, once at the end of the 1970s bear market and once in the midst of the depression.

Trading Pattern 2012 vs. 2011

As we get into the final weeks of July, we find the market in an eerily similar spot to the one that it was in this time last year.  So far 2012 has looked a lot like 2011.  Hopefully we don't repeat last year's steep drop to begin August.