During the past few years, I have referred to market breadth as one of the more important metrics of the stock market’s health. As we close in on new highs in the cumulative advance-decline line, it is time to revisit this internal indicator.
As the chart below shows, the Standard & Poor’s 500 Index has rallied from its October lows. But for the past few months it has been unable to break out.
Source: Bespoke
The technical analysts at Lowry Research note that “Although the major price indexes remain at the upper boundary of their respective multi-month trading ranges, the current character of the market . . . still appears to suggest a sustained and decisive upside breakout from the trading range is unlikely over the near term.”
The optimistic description of this in lay terms?: The market is taking a breather.
Continues here: The Reasons for a Meandering Market
I would argue it doesn’t matter what it tells us. What matters is whether central banks are keeping the spice flowing. I really don’t think they’ll ever let it fall again. It’s coordinated pumping like we’ve never seen before.
Har!
(that bark was mainly one of rueful recognition btw).