Gobs of breadth
U.S. equities are surging as tech stocks make all-time highs. This has generated "gobs of breadth", replacing earlier fears that not enough stocks and sectors were participating in the rally.
The NYSE has seen back-to-back days on which more than 90% of its volume flowed into issues that went up:
This is quite rare, and has only happened 5 other times over the past 50+ years:
When it occurred in the past, the S&P had a strong tendency to rally on every single time frame. Given the short term extremes that we're seeing right now, it's probably better to consider this as a long term bullish factor for stocks rather than a short term bullish factor for stocks.
Tech stocks continue to surge, and the NASDAQ has made new all-time highs. This has pushed the ratio of NASDAQ issues making 52 week highs / 52 week lows to an extremely high reading (0.97)
When this happened in the past, the NASDAQ's short term returns were mixed. More of the short term bearish cases occurred before the 2009-2020 bull market. But on a 1 year forward basis, this was mostly bullish for tech stocks:
As for the S&P 500, various breadth readings are registering record-nearing or record-breaking extremes. For example, a record % of S&P 500 stocks are above their 50 dma (more than 97%):
More than 44% of S&P stocks' RSI is greater than 70:
This can only be matched by 4 other days over the past 30 years. They clustered around early-1991, when the S&P made a small pullback before pushing higher.
More than 43% of S&P stocks are above their upper Bollinger Bands:
Once again, this was quite a rare event. While it could lead to a short term pullback, it was mostly bullish for U.S. equities over the next year:
It's not just U.S. markets that are registering extremes. Such extremes are registering overseas as well, for example in developed markets (MSCI World Index):
And in emerging markets (MSCI Emerging Markets Index):
These extremes and others we've noted recently could lead to a short term pullback, but on a longer term basis (e.g. 6-12 months) mostly point to more gains for stocks.