TraderFeed: What Stock Market Breadth is Telling Us

If you look closely, you’ll see something quite unusual: the large cap indexes, such as the Dow and SPX, have been making or have been close to making all-time highs. If we look at the broad universe of common stocks, however, we can see that more are making 3-month new lows than new highs. Indeed, this has been the case for the past five trading sessions, despite a rise in the large cap indexes over that five-day period.

In a similar vein, we have made 10-day highs in SPX but only 50-60% of SPX stocks have been trading over their 10-day moving averages.

A little over 5% of small cap stocks have been making fresh 50-day highs, but a little over 7% have been making new 50-day lows. A bit under 32% of SP 600 small cap shares were trading above their 10-day moving averages when the DJIA made an all-time high.

A strong trend, like a strong tide, should lift all ships. A number of ships remain beached at the moment.

Further Reading: Stock Market Breadth
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TraderFeed: What Stock Market Breadth is Telling Us

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