Merrill Lynch’s Mary Anne Bartels observes that market Breadth and Volume are confirming new S&P 500 recovery highs.
In a research note last night, Merrill’s Technical Research Analyst noted that:
“Market breadth is strong and the stocks only advance-decline lines continue to confirm new recovery highs for the S&P 500. A major complaint about last week’s breakout is the lack of volume confirmation. NYSE consolidated tape volume of
3.6bn shares was lackluster on the breakout, but our Volume Intensity Model and
on-balance-volume, which measure accumulation or buying are positive and
confirmed the new recovery highs. This confirmed break to the upside pushes out
a correction to spring but increases the risk for a deeper correction of 10-15%.”
She also observes that sentiment has gotten somewhat frothy as markets have become short term over-bought. These reflect possible pullbacks, but not the end of the cyclical rally.
Breadth & Volume Confirm Rally
Mary Anne Bartels
Merrill Lynch, March 11, 2013