Technician 의 INDEX:HIGN 용 Market Breadth Update: No News is Bad News

Market Breadth

HIGN/SPX:

The number of Stocks contributing to new highs continues to deteriorate and we haven't seen any improvement despite the gradual upside seen in Stocks indices..

This is the percentage of stocks on the New York stock exchange making new highs divided by the whole spx. The breadth shows that the bull market continues to be driven by fewer and fewer stocks, as the spx breaks to new highs however fewer and fewer stocks on the NYSE making new highs, driving the ratio down, especially within the recent months.

Stocks above long term average:

Swings from excessive bullish and bearish sentiment have been a good contrarian market indicator for the past years. Every time the indexes of stocks above or below 200-days Average reached an extreme of 90-100 percent a correction in SP500 was close.

Instances where the index started falling, diverging away from the SP500 index (indicating internal strength is weakening) were bearish signals, as at least a hefty correction followed. The chart below Illustrates these divergences, where periods of prolonged divergence followed by a more severe downside move, while minor divergences followed less severe corrections.