New Highs vs New Highs
The Nasdaq is at new all-time highs, and more stocks were making new lows than new highs.
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The down and outs got their once-a-week love. Is it possible for it to last longer than one day? Let’s start with what the statistics for Monday looked like and do a little comparison.
Breadth turned positive, and it’s only the third such day in the last ten (that’s a short term oversold condition for the others). Net breadth on the NYSE was +520. It could have been better. For example, last Wednesday, the S&P was up 45 points (it was 41 on Monday), and net breadth was +1150. So we’ll call it better, not great.
In the morning, when stocks were down, the number of stocks making new lows on the Nasdaq had not gone beyond last week’s reading (a positive), and then the market turned higher. Yet by the end of the day, with the market not revisiting the morning lows, the new lows expanded, ending the day with a bit more than we saw on Friday.
To recap, the Nasdaq is at new all-time highs, and there were more stocks making new lows than new highs.
Now take a look at the chart of stocks making new highs on the NYSE. Notice how the rally off that January low sees a consistent rise in stocks making new highs. It tracks right along with the market. In early March, (box on the chart) we get a peak reading around 440, the market backs off for a few days, and then rallied again to a marginal new high and there aren’t even 400 new highs.
The market then corrects and makes a low in mid April. The new highs rise, albeit never with the zest they did in the first quarter. The new highs peak just shy of 300 issues in the middle of the month. Since then the S&P is up three percent and we don’t see new highs anywhere near where they were when the S&P was at 5300, let alone the March high around 5200.
I know that doesn’t bother most folks because as long as the index movers are rising it’s all good but I am not sure I have ever seen the S&P at new highs and the number of stocks making new highs is under 100. Just look at the prior highs this year: they all had well more than 100 new highs.
Can that change? Sure. If the others can get oversold enough to take hold. If they can take the mantle from the index movers. They have an uphill climb to do it but that’s the market’s challenge.
In the meantime, the Daily Sentiment Index barely budged. I would love to be able to say why but I can’t. As I have explained before it takes an awful lot to push it over 90. Currently Nasdaq is at 88 as is the S&P. The VIX is at 12.
