Breadth Lacks Oomph As Many S&P Stocks Still In Bear Markets

This is an abridged version of our Daily Report.

Lacking a little oomph

Stock indexes have reached record highs, but there isn’t much oomph in the move. The McClellan Oscillator has been negative for nearly 3 weeks, which is a long time given the run to new highs in the S&P. When the index hits a new high with a streak of negative breadth momentum like this, returns were weak.

Bear within a bull

More than 70 S&P 500 stocks are more than 20% below their 52-week highs.

That is well below the 250+ that are typically stuck in bear markets when the S&P is struggling, but it’s an abnormally large number for a time when the S&P itself is at a new high.

An extended period of speculation

The smallest of options traders spent 42% of their volume buying speculative call options to open in the week ended September 14. That tied for the most since the 2009 market bottom.

Tale of two markets

The Optimism Index on the main REIT fund, VNQ, dropped below 9 on Monday while XOP is above 85.