INDICATOR EXPLAINER · #06
% of Stocks Above 200 MA — how broad is the trend?
Of the ~100 large-cap S&P constituents we track, how many are currently trading above their own 200-day moving average? This one number captures something the index alone can't: are stocks broadly participating in the trend, or is a handful of megacaps carrying everything?
Today's reading
Same number you'll see on this component's card on the main dashboard.
What is "% of stocks above their 200-day MA"?
For each stock in our tracked universe (~100 continuously-public large-cap S&P constituents), we compute its 200-day moving average and check whether today's price is above or below that line. The BATS number is simply the percentage of the universe currently above trend.
This is a classic Wall Street breadth measure — professional
platforms track it as $SPXA200R on the full S&P 500.
We compute our own version from mega-cap constituents so we don't
depend on a paid data feed. Same conceptual signal, slightly narrower
universe.
Historical distribution (2005–2026)
- Median ~75% (uptrend is the base case)
- Extreme low below 15% (crisis: 2008, 2020 COVID)
- Extreme high above 90% (broad rally: post-crisis recoveries)
How BATS uses % above 200 MA
This is a trend/participation indicator with a strong contrarian tail at the low end. Broad participation is bullish (score goes up). Extreme breadth washouts are also bullish — the score goes to the floor, but the BATS bucket flips to "Extremely Oversold = Aggressive Buy" because the historical forward returns from that zone are exceptional.
Same direction convention as our other components: very few stocks above trend → LOW BATS (crash zone, buy signal), most stocks above trend → HIGH BATS (broad healthy uptrend).
| % above 200 MA | BATS points | Bucket |
|---|---|---|
| Below 15% | 5 | Extremely Oversold |
| 15% – 30% | 5 – 25 | Very Oversold → Oversold |
| 30% – 45% | 25 – 45 | Slightly Bearish |
| 45% – 65% | 45 – 65 | Neutral → Slightly Bullish |
| 65% – 85% | 65 – 80 | Bullish |
| Above 85% | 80 – 90 | Bullish (broad rally) |
Note: Notice the score CAPS at ~90 — we do not punish extreme breadth. The backtest below shows why: historically, very high breadth just means the trend is broadly intact. It has NOT been an exhaustion signal.
Does it work? — Historical backtest (2005–2026)
For every trading day where we have a valid breadth reading, we compute this indicator's BATS score and measure how the S&P 500 actually performed 6 and 12 months later. ~5,000 samples across two crashes (2008, 2020) and multiple recoveries.
What the data actually says
Three findings from the 20-year backtest — and one of them is the strongest single-indicator buy signal in the entire BATS toolkit:
Extreme breadth washouts = strongest contrarian buy signal we track.
When less than 15% of stocks were above their 200-day MA, the S&P was up an average of +37.3% over the next 12 months, with every single one of 135 historical instances positive. Between 15-25%, forward returns averaged +30%, 95% positive. That's dramatically above the +12% baseline — the biggest edge of any single indicator in the BATS composite.
Takeaway: When most stocks look broken and the tape feels ugly, history says step in. This has worked in 100% of historical instances at the extreme.
The 30–40% "recovering but not safe yet" zone is the WEAKEST bucket.
When breadth sits between 30% and 40%, forward 12mo returns average only +8.1% with 72% positive — meaningfully below the +12% baseline. This is the zone where the market is bouncing off a low but hasn't confirmed the recovery. Same pattern our SPX-vs-200MA indicator shows at moderately-below-trend levels.
Takeaway: Don't confuse "off the lows" with "safe." Breadth needs to broaden past 40-50% before the trend gets its footing.
No exhaustion at extreme highs.
When 90-100% of stocks were above their 200-day MA (broad, healthy uptrends), forward 12mo returns averaged +11.2% with 83% positive — essentially baseline. There is no "too many stocks in uptrends" penalty in the data. The intuition that extreme breadth precedes selloffs is not supported by history.
Takeaway: Broad rallies don't die of old age. When most of the market is trending up, respect the trend — the historical data says it continues at baseline pace.
How to use this information
- The extreme low is the money reading. Below 20% breadth is rare (about 4% of trading days) but has historically been the single best contrarian buy signal in our toolkit. When you see it, other components will usually confirm (VIX spike, RSI oversold, credit stress).
- Middle-range readings track baseline. Between 40% and 85%, forward returns cluster near baseline. This indicator's edge comes from the tails.
- High breadth isn't a sell signal. Even at 95%+ readings, forward returns stayed near baseline. Broad rallies persist. Don't fade broad participation just because it's high.
- Watch for breadth thrusts. When this indicator jumps from below 40% to above 70% in a short window, historically that has marked major bottoms (2009, 2020, 2022). The market signaling "everything is participating now" is a strong bullish confirmation.
- Universe caveat. We compute this from ~100 large-cap S&P constituents that have been continuously public since 2005. This slightly overweights mega-caps vs the full 500. In Mag-7-dominated regimes this may read HIGHER than the equal-weight universe would. We may expand to the full 500 constituents later.
Reminder: None of this is investment advice. Historical patterns are not guarantees. Always do your own research or talk to a financial professional.