A Look at New Highs and Lows During the Stock Market Rally

Above we see a different measure of stocks making new highs vs. new lows than the usual 52-week figures posted by the exchanges.  This measure takes all common stocks and looks at the number making fresh three-month highs minus those making fresh three-month lows.  (Data from the Barchart site).

In general, the new highs top out ahead of price during intermediate-term market moves and new lows either lead price lows (at important bottoms) or are coincident with those lows (at corrections).  Note how we recently peaked in new highs following the August lows; note also how the current levels are well below the levels recorded at the July peak, despite new highs in SPY.  This partly reflects continued relative weakness among small cap shares, with the Russell 2000 Index well below its March and July highs. 

Also lagging July highs are energy shares (XLE), consumer staples stocks (XLP), industrial issues (XLI), and utilities stocks (XLU), as well as homebuilders (XHB) and retail stocks (XRT).  Thus far the stock market rally has shown itself to be durable--and increasingly selective.
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