Bespoke has a chart that points out the spread, from the SPX to the 50DMA is .... High.
But when you look at the chart, and the time frame. One may draw the conclusion that we are Overbought, which we are. One could also realize that being "Above that resistance" is Not exactly a 3 Standard Deviation event, if you take into account things like "Crashes" and "Recessions" Market Crisis. One could easily say that Getting above that line has a 2 out of 3 chance being broken after a "market Crisis" (90's recession, LTC Crisis, Tech Crash(which is the Outlier))
Some technicians actually discount historical Backtesting as a valid tool for trading
It also Appears that the Chart Also Obeys Newtons Third Law of Motion,
Extreme moves below then to "Suggest" swings in the opposite direction. The more Extreme one way, the more extreme the potential in the opposite direction.
There is also the factor of the 50DMA is now Upsloping, and over time it will be closing the gap with the market from this time forward.
The conclusion I'd draw is that it's Interesting, But not exactly a Clear indicator, I'd also look at the chart and realize if it does get above that line, it tends to stay there for quite a few weeks. It is interesting as a Sentiment indicator from Bespoke, there is no shortage of "Influence over the market" that their opinion holds.
For those of you who, arn't regular readers. Weeks ago I referenced the Exit from a "Real Bottom", and if you look at the 50DMA out of Real bottoms, the market has Roughly a 50/50 chance of bouncing above the 50DMA for a few weeks after Breaking through it.
Of note is that we have been "Consolidating" Above the 50DMA for about a week and a half(roughly... I'm not breaking out my charts to check how long we have been moving sideways since breaking the 50dma).
I'd also suggest that next week anything short of Enron Number out of the banks will be Market Positive, as negative as the sentiment seems to be.
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