Over the weekend, I presented several market indicators that I track closely and showed how they were reflecting overall bullish trending. Above we see new 65-day highs minus new 65-day lows (red line) for NYSE, NASDAQ, and ASE stocks plotted against daily closes for the S&P 500 Index.
Note that new highs are expanding, not contracting. This is what we'd expect to see in a market that is gaining strength--and poised for continuation--not one poised for major reversal.
To be sure, we've seen several consecutive days of rising prices and are due for some consolidation. To this point, however, the new high in the advance/decline line for NYSE common stocks and the expansion of the number of stocks making new highs suggest that any such consolidation may be limited in time and extent.
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To be sure, the ES peeled away from the upper Bollinger band and formed a doji yesterday, no upside continuation today, and all five of my favorite indicators (stochastic, RSI, CCI, momentum, and money flow) have peaked on the daily chart and are headed down. I will have my short hat on tomorrow, purely on technical grounds.
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