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Stock Market Barometers

July 21, 1998

Fundamental and technical indicators of the market's health

Key indexes vs. their 200-day moving averages:

A stock index's 200-day moving average indicates the basic trend, up or down. It is generally bullish if the index stays above the average.

S&P 500 (blue-chip stocks), Friday: 1,186.75

200-day moving average, Friday: 1,036.76


Russell 2,000 index (smaller stocks), Friday: 462.36

200-day moving average, Friday: 452.09


Price-to-earnings ratio of Standard & Poor's 500: 26.14*

Based on operating earnings per share, 12 months ended March 31; average since 1923: 13.5


Dividend yield of the Standard & Poor's 500: 1.35%

Average dividend yield of blue-chip stocks; avg. since 1923: 4.5%


Weekly new highs vs. new lows on the NYSE: 388/252

Data for the week ended Friday. More highs indicate a bullish trend.


Investment newsletter sentiment:

Stocks' near-term trend as predicted by 135 independent investment newsletters, weekly survey by Investors Intelligence. The data are often viewed as a contrarian indicator: A rising percentage of bulls can signal a topping market.

July 10

Bullish: 47.1%

Bearish: 30.6

Correction: 22.3


Bullish: 52.0%

Bearish: 24.0

Correction: 24.0


Put-call ratio: 0.40

The ratio of stock put options to call options traded last week on the Chicago Board Options Exchange. A low put-call ratio--under 0.40--can be construed as bearish because it indicates a high level of optimism, leaving a lot of room for disappointment.

* Now calculated based on operating earnings, which exclude one-time charges--so P/E is lower than if actual earnings were used.

Source: A.G. Edwards & Sons. More information can be found at on the World Wide Web.

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