With Thursday's powerful rise, we had 809 stocks across the NYSE, NASDAQ, and ASE register fresh 65-day highs and 1257 record new 20-day highs. By contrast, we had 227 and 604 new lows, respectively. While these numbers are below peaks recorded a few weeks ago, they're a meaningful turnaround from recent weakness. Demand, a measure of strong upside momentum, closed at 163; Supply at 24. That indicates that the rise was broad, affecting the majority of issues. This is also reflected in the relative strength of the small caps, with the Russell 2000 futures hitting a post-March price high.
My technical strength measure is a method of quantifying price trending behavior over a short-to-intermediate term time frame. Here's how the S&P 500 sectors look at present in terms of technical strength:
CONSUMER DISCRETIONARY: +220
CONSUMER STAPLES: +220
HEALTH CARE: +280
What we can see is that, as a group, there's been a nice turnaround from recent lows, but we continue to see very mixed sector performance. The weakness in the materials sector and the restrained strength of the energy shares are particularly noteworthy, as commodities have been performance leaders of late.
Technology remains a performance leader, which is consistent with my recent findings on money flows. The big story, perhaps, remains financial shares, which continue to lag badly. We've seen many steps taken to stabilize vulnerable banks, and these have yet to translate into meaningful, sustained confidence in the sector. This remains a potential Achilles heel for the market's attempted recovery.
Money Flow Analysis