The magic number is 16%. That’s the margin above the S&P 500’s 200-day moving average that seems to have spurred a selloff in the last eight months. And we just hit it again.
The 16% figure coincided with a 10% correction during the September tech wreck, a 2% drop in November and December, and then ~5% selloffs in January and February. Naturally, the assumption is it’s largely a result of price action in a handful of the tech heavyweights. For each of the pullbacks below, the NYSE FANG+ Index was trading somewhere between 36-40% above its 200-DMA and drove the benchmark lower.
Right now, however, the NYSE FANG+ Index is only 22% above its 200-DMA. So it’s unclear if the broader pattern will hold. But if it does, tech may not be responsible for the pullback.
The 16% figure coincided with a 10% correction during the September tech wreck, a 2% drop in November and December, and then ~5% selloffs in January and February. Naturally, the assumption is it’s largely a result of price action in a handful of the tech heavyweights. For each of the pullbacks below, the NYSE FANG+ Index was trading somewhere between 36-40% above its 200-DMA and drove the benchmark lower.
Right now, however, the NYSE FANG+ Index is only 22% above its 200-DMA. So it’s unclear if the broader pattern will hold. But if it does, tech may not be responsible for the pullback.