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Ritholtz: Ten Bullish Charts, Signals and Indicators

2. SPX Losses

The S&P has given up nearly the entire gain from the 2002-'03 period. This sort of action reminds us of other long trading ranges. Recall 1966, when the Dow first hit 1000, to 1982 when it got through it on a permanent basis.

Over that period, there were five major rallies and selloffs. My suspicion is that the 2003-15 market is likely to be a very rangebound market. Now that this five-year rally has completely sold off, it is setting up for the next leg up (very 1973). Note that these were not buy-and-hold rallies, but six- to 18-month trades.

S&P 500 Retest
Click here for larger image.
Source: Bloomberg

3. Dow Components and the 200 Day Moving Average

All 30 Dow stocks are below their 200-day moving average -- a condition that has only occurred once. The last time was right after the 1987 crash.

4. Cash Allocation

Investors' current allocation to Cash is well above its 21-year mean, and at the highest levels since the 2002, 1998 and '90 lows.

Cash Allocation
Click here for larger image.

The last few times were close to these levels was October 1987 and March 2003.
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