Whenever the equity market makes a major move in either direction, it is always useful to look at breadth readings for any confimation or divergence. With that in mind, it was encouraging to see last Thursday that on the same day that the S&P 500 hit a new high for the year, cumulative breadth for the index also hit its highest level of the year.
Given the high correlation between individual stocks, the case can be made that breadth readings are less important because stocks now are moving in the same direction than ever before. That being said, we'll take a breadth confirmation over a breadth divergence any day. Anyways, the same people who would use the correlation argument are probably the ones who would be first to point out a divergence in breadth if there ever was one.
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