The stock market continued to move upward last week despite overbought readings on many of the technical indicators we follow, illustrating the considerable strength behind the current rally off the February 8th short-term market bottom.
Large cap stocks have continued to lag far behind small and mid cap stocks, since the 8th of February, making it appear to the uninformed investor, who follows only the Dow Jones Industrial Average, that the majority of stocks in the market have not yet risen above their January highs.
By looking at a chart of the small cap Russell 2000 Index, the S&P Midcap 400 Index or the large cap S&P 500 Equal Weight Index (see chart below), it becomes apparent that the broad majority of stocks traded on the NYSE rose above their January highs two weeks ago.
Although the stock market is showing considerable long-term strength, the S&P 500 Index did encounter some short-term resistance at the 1,150 level last week, as expected. We will have to wait and see if these barriers will cause a mere pause in the current uptrend or the start of the next short-term correction.
Broad Majority of Stocks at New Rally Highs
