Traders work on the floor of the New York Stock Exchange. Trading has been volatile on US markets this year. Photo by Michael M Santiago/Getty ImagesTechnical analysts warn that last Wednesday’s big leap higher doesn’t necessarily mean the worst is over — as Bespoke Investment notes, there have been no fewer than 12 days this year where the Nasdaq rallied over 3 per cent. Still, there are some positives.
However, market breadth remains concerning. . One particularly telling indicator — one referenced both by Delwiche and research firm SentimenTrader — is to examine the percentage of S&P 500 stocks hitting new one-month highs. For decades, stocks have gone on to gain over the following year whenever this number has spiked above 55 per cent, but the current market remains well shy of that number.