Why This Rally Continues To Look Strong
My pal Steve Russolillo at WSJ wrote a killer piece today on how breadth is stronger now than previous peaks.
The best stat he cited was the top 10 contributors to the SPX this year have accounted for just 18% of the indexes rally this year, versus 65% back in 1999. In other words, many more stocks are participating. The more stocks participating, the stronger the lasting power of the rally is.
The chart above is one of my favorite and one I’ve been using all year as a sign this bull market is indeed alive and well. It is the cumulative advance/decline line at the NYSE. As you can see, we saw some big time weakness under the surface back in 2000, as just about the only thing going up at the end was big cap tech stocks.
The 2007 peak saw more subtle weakness, but weakness under the surface was a warning yet again.
Fast forward to now and the internals continue to look very strong and show no signs of slowing down.