In addition to the extremely negative sentiment of individual investors, another reason for cautious optimism in the global stock market is the dynamics of the «width of the market.» Recall that this category of indicators includes those that show the degree of participation of shares traded on the stock exchange in a particular market movement.
For example, the graph above compares with the dynamics of the NYSE Composite index the share of securities included in the NYSE index (in%), which are trading above their 50-day averages. The NYSE index is more representative than the S & P-500, as it includes not the 500 largest US companies by capitalization, but 1,900 companies, 1,500 of which are American, and the rest are ADRs for foreign stocks.
The picture is quite clear now: the NYSE index updated at least October minimum, but the share of securities in the index, which are trading above their 50-day averages, has grown and is much higher than the October levels. Recall that the 50-day average is one of the most popular and reliable filters that separate the medium-term trends. That is, this graph visually reflects a simple fact — the “average” market continues to fall, but behind the scenes more and more papers do not confirm this drop and remain in an uptrend. The picture very much resembles the beginning of 2018, when a similar discrepancy between price and «market width» occurred in February-March.
Together with the negative sentiment of the physicists, such an indicator of the “internal health” of the market will make any signal to turn around more meaningful (when and if it appears). By themselves, these signals mean little, because the main thing is price dynamics.