Research Excerpts

Pay Attention To Market Breadth This Week

Posted on: Tuesday, January 31st, 2012

The following (green highlights) is a brief excerpt and one of the four charts that appeared in our Friday January 27th report entitled, The Week Ahead: 4 Charts To Watch For US Stocks.

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The Week Ahead: 4 Charts To Watch For US Stocks

Posted on: Friday, January 27th, 2012

Chart 3: Market Breadth

This chart displays the S&P 500 (SPX) daily since 2011 in the upper panel with the 26-Week New Highs/New Lows Ratio plotted in the lower panel (blue line).  This measure of market breadth is derived by dividing the new highs in the NYSE Composite Index for the last 26 weeks by the new highs plus new lows.

The red highlights on the chart show that this indicator is currently hovering at an historically high extreme of 90%, indicating an extreme number of new 6-month highs being made relative to the number of new highs plus new lows, which has previously either coincided with or closely led most every near term peak in SPX during the past year.

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