Look like it's still a pretty healthy rally to me. I would start to look for a major decline or long term trend reversal if we continued to hit highs but fewer and fewer stocks hit 52-week highs. Here's how I have used this information so far: I have been trading an accumulation strategy for a couple of weeks, which does not rely on predicting price moves (it's just very simple buy-low-sell-high, coupled with call and put writing). However, it does lousy in a bear market.
Nice post. It's been hard to buy these 6+ months of rally from an economic prosperity standpoint, but the breadth is undeniable. It's actually pretty indicative of many past bullish reversals over the 20th century. There's a massive up-thrust in breadth and R.O.C. that swings from negative extremes to positive extremes in very short periods of time. Many intermediate term bull markets (in a historical DOW context) started from this very violent breadth and ROC snapback. I guess we'll know by the end of the year if this is the case with the "great bear rally of 2009."
Turning over? Bought an OEX 520 / 27 Nov PUT a few minutes ago. Now that's a divergence! I've also noticed most of the stocks I've written options on have gotten whacked the past week or two, despite the market high a few days ago.
i agree, with the number of new highs with solid companies leading this rally , this rally looks healthy...
I dumped my put, puked (not really), and swore to stick with futures for market movements from now on. I really wanted to get out Sunday around 6pm.
Just closed all my shorts for an extremely small loss. See below-- over the past week when the market declined, the hi/low ratio made a higher low. Looking at a bunch of smaller stocks I trade, about half are hitting new highs. I am thinking about getting long for a quick hit on an upwards breakout here.