The recent market update emphasized that we have been seeing a moderation of buying interest among stocks, but not an expansion of selling interest. The point was that we need to see the latter--not just the former--to turn a market cycle around.
The most recent market action has continued this pattern: we've seen moderate buying interest among participants, but significantly below average selling pressure. In other words, what's been keeping stocks high is as much an absence of sellers as a historically large presence of buyers.
When we examine net buying and selling activity, that means that buyers remain in control. Above we see cumulative net upticks vs. downticks: 1) across all NYSE stocks; 2) across all U.S. stock exchanges; and 3) across the Dow 30 stock universe. In each case, we've been on a steady ascent and most recently have moved to highs. That is wildly different from what we saw in September, when net selling exceeded net buying well in advance of the market peak.
To be sure, market breadth has not been roaring: stocks making new one- and three-month highs this week have run about half the level we saw at the end of October. Still, those one- and three-month highs have continued to exceed new lows, as we're not seeing the kind of breadth of weakness that characterized the market tops in July and September. Simply assuming that overbought markets will reverse in the absence of demonstrable weakness can be hazardous to a trader's wealth.
Further Reading: NYSE TICK