Breadth Improving

The NYSE A/D line has reached the July 20, 2015 level while the SPX has risen back to level near August 19, 2015. This shows the A/D has improved much more than the index, and that is a good sign if it continues. The new high/new low is also back above zero, that mean there are more issues making new 52 week high than 52 week low, another sign of improving breadth.

What Is The Breadth Telling Us - 1/31/2015

In this video, I will demonstrate how I use some of the market breadth indicators and how to get some clues on where the market might be headed.

Was That It?

Was August 7, 2014 the day the SP500 put in an intermediate low for the recent market pullback (some call it a correction). Take a look at the following chart with couple market breadth indicators on it. The advance/decline and the new-high/new-low show a slight positive divergence as the SP500 made a new low on 8/7/2014.

Market Continues To Diverge

The market continues to split between the large cap/value stocks and the small cap/growth stocks. Although the Russell 2000 show a mimic of relative strength today, but don’t let this deceive you. Here is the chart of the NYSE advance/decline vs. the SP500.

Renew Strength

The market closed at another new all time high. The DJT gave a Dow Theory confirmation today by closing at a new all time high along with the DJIA. The only index that shows a slight weakness is the Nasdaq 100, and that is due to some negative stock price reactions from disappointed earnings report.

Uncharacteristic!

The DJIA was up since today's opening while the SP500, Nasdaq 100, Russell 2000 and the DJT all were negative. By the end of the trading session, the DJIA closed with a gain of 138.40, SP500 plus 9.68, Nasdaq 100 a gain of 9.03, the Russell 2000 plus 6.387, and the DJT closed with a loss of 1.91. These gains and loss are no big deal. But what is the big deal is the uncharacteristic of the market breadth indicator

Are We There Yet?

As the market continue to climb higher, many market participants are preoccupied on waiting for the correction to appear. While these participants wait and ponder on when will this market will correct, they are missing the opportunity to long this market. Those that are focused on riding this market up are not asking "When will the overdue market correction appear?". Instead, they are asking "Are we there yet? Has the market reached the top?"

Here are some observations to help those that are wonder whether the market has reached the top. From the chart below, one can easily see the SP500, DJ Industrial 30, Dow Jones Transportation, Nasdaq 100,