Is it Time for a Pullback? Check Bars Since MA Test

An old market adage declares that “prices never move in a straight line.” Dips occur even in bullish markets. But how can traders know when prices may be due for a pullback?

Today’s script tries to answer that question by asking how many bars have passed since a stock, index or other symbol has tested a given moving average. Long periods of time without touching a line such as the 50-day simple moving average, for example, could prompt traders to be more patient.

Bars Since MA Test counts how many bars have passed since prices touched or crossed the MA in question. The resulting value is plotted in a simple histogram. Users can set the MA length and type. By default, it uses the 50-day simple moving average (SMA).

The chart above applies Bars Since MA Test to the S&P 500. It shows that the index has gone 129 bars without testing its 50-day SMA. That’s the longest since a 146-bar stretch between July 2006 and February 2007.

Other longer runs include January-August 1995 (156 bars), November 1960-June 1961 (144 bars) and April-November 1958 (158 bars).

Given the small number of comparable readings, could traders suspect the current advance is getting long in the tooth?

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