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.
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