via Bespoke:
Monday, November 14, 2011 at 12:05PM
The monstrous rally in the S&P 500 off the October lows has helped cumulative breadth nearly make up all of the Summer declines. As of Friday’s close, in fact, breadth was one or two good days from making a new high. Technicians often look for breadth to confirm price, so theoretically this is a positive signal. We would note, however, that back in July breadth also made a new high, but the S&P 500 failed to take out its Spring 2011 highs.
In the charts below we highlight the cumulative breadth charts of all ten sectors. At this point, only three sectors (Consumer Staples, Energy, and Utilities) have seen breadth hit new highs in this rally, while Consumer Discretionary, Health Care, and Materials are very close to making new highs in the last year. One notable sector that isn’t even close to new highs in terms of breadth is Technology. Although the sector has been outperforming the overall market, breadth remains well off its highs. One explanation for this divergence is the fact that a lot of the strength in the Technology sector this year has been in the sector’s largest stocks like Apple (AAPL), IBM, Intel (INTC), QUALCOMM (QCOM), and Visa (V).
To see the pretty charts, go here.
