Yesterday, the bulls demonstrated that they are still present, with the S&P 500, 400, and 600 reaching their highest 1-month highs since November.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what it shows:
The blue line in the top panel is the S&P 500 index price.
The black line in the second panelshows the percentage of S&P 500 stocks making 1-month highs.
The gray line in the third panelshows the percentage of S&P 400 stocks making 1-month highs.
The red line in the bottom panelshows the percentage of S&P 600 stocks making 1-month highs.
The Takeaway: Yesterday, all major indices increased by over 1.5%. This was an impressive day for the Bulls on the back of eased inflation fears.
With this broad participation, we saw 1-month new highs move higher and have now reached their highest levels since November across all market capitalizations.
The energy sector led the 1-month new highs list yesterday, with 95% of S&P 500 energy stocks, 85% of S&P 400 energy stocks, and 79% of S&P 600 energy stocks reaching 1-month highs.
However, the weight of the evidence still leans bearish, but today marked a promising starting point for the Bulls. I will be paying close attention to see if they can maintain this momentum and deliver some upside follow-through.
I still believe this is a time to protect my capital, which would give me plenty of ammo in the future to deploy once there is confirmation that the Bulls are back in control.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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