Last week's indicator update suggested that we needed to see a broadening of the market rally in order to stay in bull market mode. We did, indeed, see that broadening early in the week, as we made new highs in the number of stocks registering 65-day highs vs. lows (middle chart) and saw stocks with positive momentum continue to outweigh those with negative momentum in the Cumulative Demand/Supply Index (top chart), which has stayed positive since March.
With the expansion of new highs early in the week and continued bullish sentiment shown in the Cumulative NYSE TICK (bottom chart), it is not surprising that the sectors that I follow have sustained bullish trends. Friday's price highs in the major indexes were not confirmed by fresh highs in the 65-day high/low measure, an indication that the rally may be in for a period of consolidation. As long as we stay above the May highs in the S&P 500 Index, however, one has to respect the sustained buying displayed by this market.
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