It was another day with decent breadth and therefore the indicators did not change much. The breadth indicators are still pointing upward.
Of course, because breadth has been green for 14 straight days, we remain overbought. I would, however, note something odd about breadth. Since the early October low, there have only been six days where breadth on the New York Stock Exchange has been positive 1,000 or greater. That is very unusual.
To put it in perspective, coming off the December low last year, we saw 12 of 13 days with positive breadth. Seven of those days saw net breadth positive 1,000 or greater. That's more than we have had in two-and-a-half months.
Even if we say that was a unique time because it was coming off a major low, then let's look at mid-February when breadth had another strong showing. That's seven weeks after the low, and breadth was green for eight of nine days. Yet there were still three days with quadruple-digit readings.
I don't want to say that this is negative and that is positive, because good breadth is good breadth, but the manner in which this rally has seen breadth develop is -- shall we say -- quite different.
Speaking of the low at Christmas a year ago, let's take a look at what a difference there is in sentiment. The 10-day moving average of the put/call ratio was just over 125% (green arrow). Monday, it was just under 90%, closing in on 85%, which as you can see, tends to be the low end of the range.
But rather than discuss the stretched sentiment and good breadth, let me note that no one seemed to notice that FedEx (FDX) , which saw all sorts of bearish commentary on it last week, has managed to recapture that $150 area. It's still an ugly chart, but why can't it make an attempt at filling that gap?
Wouldn't that surprise the majority? Keep in mind all that hate for the stock and still it couldn't make a lower low.
Then there is gold. I first warmed up to it about a month ago, in late November, and it hasn't done much. It still sits below that big resistance at $140 on the SPDR Gold Shares (GLD) . But what if it can cross over that line, maybe even come back and retest it and then rally again? Wouldn't that make the chart look better?
I don't know how it maps out. What I've drawn in blue is one possibility, but I do know the chart improves while sentiment remains subdued for it.
Wishing all who celebrate a very Merry Christmas!