Glaringly Poor Statistics
In Monday's column I laid out the case for a head-and-shoulders top to take hold after we turn the calendar into January. However, I noted that the market was not yet overbought, and that I expected some sort of oversold rally to develop this week for year-end. So I think it's too soon for me to do much complaining -- yet some of the statistics in Monday's rally were so glaring that I cannot sit quiet.
Let us begin with the number of stocks making new highs. If I thought they made for poor reading before Monday's rally, things didn't change much with Monday's climb. Here is the progression: On Nov. 29 the S&P 500 closed at 1416 with 163 new highs. Dec. 3 saw a higher intraday high than on Nov. 29, and new highs lagged with 149. Last week, on Dec. 11 and Dec. 12, the S&P closed at 1427 and 1428 respectively with 125 and 122 stocks at new highs, respectively. I think you can see the progression of higher highs in the S&P and fewer new highs in stocks....450 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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