About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Tuesday, December 17, 2013

Stock Market Breadth

Market breadth continues to rise to confirm an ongoing cyclical bull market. Breadth
continues to make new highs, but note how the uptrend in the cumulative A/D line has
been fading since the Fed raised the issue of tapering its QE 3 program in May and since
there has been a sharp upswing in the long Treasury yield as well. The more interest rate
sensitive sectors and funds have lost considerable momentum since the spring of this year,
leaving the A/D line with a much milder trajectory. NYSE Cumulative A/D

Breadth has been edging a little closer to trouble, but it has not reached it yet even though
the A/D line has broken the normally important 30 day m/a on several recent occasions. A
break below the 145K line just ahead could signify something more serious as that would
would herald more downside after a period of just slightly higher highs since May. Note as
well that the RSI for the A/D line is trending down, but note too that touches of RSI
down around the 30 level in recent years have proven to be decent 'buy' markers.

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