Still, those who look to market phenomena such as breadth, momentum and trading patterns to inform their investment decisions see a more optimistic picture, and are growing convinced the recent gains in equities are unlikely to fade.
That trend has reversed recently. The number of new highs on the New York Stock Exchange and Nasdaq surpassed new lows last week for the first time this year on a weekly basis – an encouraging sign to Delwiche and other strategists. “The probability that we are higher in a year is much higher with that flashing,” said Todd Sohn, technical strategist at Strategas.A market that is galloping higher also tends to sustain its momentum. A rise of 15 percent or more in the S&P 500 within 40 trading days has been followed by an additional average gain of 15.3 percent over the next year, Delwiche said.