Percentage of Stocks Above the 200-Day Moving Average

The percentage of stocks above the 200-day moving average measures how many stocks in a major index (S&P 500, Nasdaq, Russell 2000) are currently trading above their 200-day average. It is one of the most widely watched breadth gauges because it captures whether the market’s trend is broad-based or concentrated in a few names.

What the 200-day moving average represents

The 200-day MA is a long-term trend reference. A stock above it is in a sustained uptrend; below it, a sustained downtrend. Technicians often use the 200-day MA as a first line of support in bull markets or resistance in bear markets.

The percentage of stocks above the 200-day MA translates this individual-stock concept to the market as a whole. It answers the question: “What fraction of the market is actually in a long-term uptrend?” During a healthy bull market, this number should be high—typically 70% or above. During a bear market or extended weakness, it should be low—below 30%.

Reading the gauge: threshold levels

80%+ Expansion phase

When 80% or more of stocks are above their 200-day MA, the market is in what technicians call a “confirmed bull market.” Almost every stock is rising on a long-term basis. Pullbacks are usually brief. New investors catching on to the trend tend to keep money flowing in.

This reading is sustainable for weeks or months during a robust bull run. But it is also a sign that enthusiasm is broad and euphoria risk is rising. When readings remain above 85% for more than two months without additional new highs, some technicians view it as a top signal—not an immediate reversal, but a warning that downside risk is building.

50–80% Healthy participation

This range is where a bull market usually operates. Not every stock is soaring, but most are higher for the year. Sector rotation may occur (tech outperforming financials, for example), but the overall trend is up. This is a neutral to bullish reading and is compatible with ongoing rallies.

30–50% Deteriorating breadth

A percentage below 50% but above 30% signals that the market is weakening or that breadth and price have diverged. If the S&P 500 index is still near record highs but only 45% of stocks are above their 200-day MA, that is a classic breadth divergence warning. Typically, within 4–12 weeks, either the index falls to align with breadth, or breadth recovers.

Below 30% Capitulation or reversal setup

When fewer than 30% of stocks are above their 200-day MA, the market is either in a deep bear market or in the final washout of a decline. This reading is associated with panic selling, margin calls, and forced liquidations. Historically, such extremes have been followed by strong rebounds—not immediately, but within days or weeks.

Comparing the 200-day MA with shorter-term breadth measures

The percentage above the 200-day MA is a longer-term breadth gauge. It answers: “Is the sustained trend healthy?” By contrast, the new highs–new lows indicator and advance-decline line are more short-term focused, responding to daily volatility and rotations.

A stock can be above its 200-day MA but below its 50-day MA (in an intermediate pullback within a longer-term uptrend). The percentage above the 200-day MA will stay elevated, while the percentage above the 50-day MA drops sharply. This is normal and not a warning signal.

However, if both percentages are collapsing simultaneously—fewer than 40% above the 50-day MA and fewer than 50% above the 200-day MA—it signals that the market is rolling over across all time horizons, a more bearish signal.

Worked example: 2021–2022

March 2021:

• S&P 500: +5% year-to-date
• Percentage above 200-day MA: 92%
• Interpretation: Strong bull, broad participation.

September 2021:

• S&P 500: +17% year-to-date, near record highs
• Percentage above 200-day MA: 78%
• Interpretation: Still a healthy bull, but breadth is trailing price slightly. Sector rotation is happening.

December 2021:

• S&P 500: +27% for the year, record high
• Percentage above 200-day MA: 58%
• Interpretation: Red flag. The index is near all-time highs, but only 58% of stocks are above their long-term trend line. This is classic breadth divergence.

June 2022:

• S&P 500: –21% from record high; now in bear market
• Percentage above 200-day MA: 16%
• Interpretation: Capitulation. Most stocks are now in downtrends.

October 2022:

• S&P 500: –27% from record high
• Percentage above 200-day MA: 8%
• Interpretation: Extreme reading. Historical precedent suggests a bounce was likely within weeks.

This sequence shows how the percentage above the 200-day MA tracked a transition from broad bull strength through divergence, into bear-market capitulation—and warned investors months before the reversal.

Limitations and considerations

Sector concentration: If the S&P 500 is dominated by a few mega-cap tech stocks, and those stocks are in strong uptrends while small-cap and mid-cap stocks are struggling, the percentage above the 200-day MA can remain deceptively high even if the majority of stocks by count are weak. The gauge is unweighted; it counts each stock equally regardless of market cap.

Index composition changes: When new stocks are added to an index (IPOs, index reconstitutions), they often come in below their 200-day MA initially, temporarily depressing the gauge even if the underlying market is healthy.

Interpretation lag: A sharp decline can occur before the percentage above the 200-day MA falls below 50%. The indicator moves more slowly than daily price action.

False bottoms: A reading below 20% sounds like it must be followed by a rally, and usually it is eventually. But “eventually” can mean days or weeks later. Do not short-sell based on an extreme reading alone.

Using the indicator for portfolio decisions

At 80%+ (euphoria):

• Reduce new commitments; raise some cash
• Protect profits on key positions
• Watch for any deterioration—a drop from 85% to 70% is a yellow flag

At 50–80% (normal bull):

• Maintain long exposure if price trend is intact
• Rotate into lagging sectors if fundamentals support it
• Use sector weakness for entry into higher-quality stocks

At 30–50% (divergence):

• Reduce position size
• Raise stop-losses or exit marginal holdings
• Prepare to raise more cash if the gauge breaks below 30%

At <30% (capitulation):

• Consider taking a small long-bias position for a bounce
• Do not short; odds favor a rebound
• Wait for the percentage to stabilize above 20% before adding aggressively

Combining with other breadth measures

For the strongest signal, use the percentage above the 200-day MA alongside other gauges:

• New highs–new lows ratio: If the ratio is compressing while the percentage above the 200-day MA is steady, sector rotation is likely. If both are deteriorating, roll-over conviction is high.
• Breadth divergence: Plot the percentage above the 200-day MA on the same chart as the price index. Divergence is most bearish when it persists for 4+ weeks.
• Advance-decline line: Use the 200-day MA percentage for trend confirmation; use the advance-decline line for daily timing.

See also