Stock Market -- Weekly

Technical
This week the focus is on the NYSE adv. / dec. line. It shows a triple top formation of the a/d
line which suggests the market may be in a make or break situation for the near term as breadth
has stalled out around the current level several times already this year. $NYAD Cumulative
breadth needs to break out top side very soon to keep the long side of the market happy.

I have also included the Value Line equal weighted stock index (top panel). The price of the
"average stock" has lagged the improvement in breadth over the past year. One reason is that
more $ has been funneled into large cap stocks. As well, volume has been more constrained,
and this indicates a lighter $ flow into equities.

Fundamentals
My weekly cyclical fundamental indicator (WCFI) declined over the course of most of June,
but the stock market rallied strongly anyway. The SP 500 is up about 8.3% this year. The WCFI
is up only a paltry 0.2%. Clearly, market players are not behaving as slavishly toward weekly
economic data as they have been over most of the current economic recovery to date. I will
become more concerned about the discrepancy if the WCFI does not perform more strongly in
the weeks ahead should the market continue to rally.