Stock Market Participation At All-Time Highs – One Area Of Concern
The other day I wrote about the parabolic advance in semiconductors. It’s not over and there should be more new highs coming. However, parabolic rallies almost never end by going sideways or mildly pulling back. They can violently punish the late comers and the greediest.
The nonsense about this market rhyming with 1999 remains laughable. I keep hearing from the bears that the rally is narrow and only a few stocks are participating. Let’s turn to our friend the NYSE A/D Line which measures, well, participation. The S&P 500 is in the upper chart while the line is in the lower one.
Folks, the NYSE A/D Line scored an all-time high the other day. That’s inarguable. Bear markets and large declines rarely begin with this behavior. Sorry bears.
“BUT BUT BUT” What about oil? What about inflation? What about Iran? All those are out there and markets are nonplussed. Now, if oil is above $120 for several months, we will have a different conversation. Anyone want to guess the percent of companies exceeding earnings expectations? Spoiler alert. It’s 85% so far.
Here’s a bone below for the bears to harp on. The percent of stocks in bull markets is below 60% with the stock market at new highs. Yes, that is a concern. It needs to be rectified. If the NYSE A/D Line follows suit then yes, I will be much more concerned. I am not concerned about the narratives.
On Monday we bought more CCJ. We sold QLD and some MDB. On Tuesday we bought QLD, IVW, XLF, SSO and more BKLN. We sold PCY.
