We finally got some movement.
I noted on Wednesday that the McClellan Summation Index had ticked up, but not enough to see with the naked eye. After Thursday's rally, we can finally see it. I would, however, note something rather odd: Breadth was better on Wednesday -- when the S&P was up nine points and the Russell 2000 was flat -- than it was on Thursday with the S&P 500 up 27 and the Russell up about 1%. I would not fuss too much, because as we looked at earlier, breadth is making new highs, and that continues.
In terms of stocks making new highs, the New York Stock Exchange continues to lag. There were 215 new highs, which is far fewer than we saw last summer and the same reading we had on Nov. 4. That date was just as the breadth of the market peaked. But the number of stocks making new highs on Nasdaq just about doubled from the prior day and is now the most we've seen all year.
If I would pick on something in the new highs and new lows, it is that the Nasdaq new lows ticked up and they did so enough to make the 10-day moving average tick up, as well. But the last time they ticked up the new highs were not nearly as expansive.
Let me report that none of the ratio charts that we've looked at lately changed much. iShares Russell 2000 Index (IWM) relative to SPDR S&P 500 exchange-traded fund trust (SPY) did not cross that line -- and is actually at a lower high than where it was earlier in the week. So that's still on the market's to-do list.
The ratio of the Energy Select Sector SPDR (XLE) to the PowerShares Invesco QQQ Trust (QQQ) that we looked at on Monday ticked, up but not meaningfully. In other words, it might have felt like oils were screaming relative to the QQQ stocks, but in reality it was much more subdued in the relationship.
I still think the QQQs relative to the S&P chart continues to tell the story that the QQQs' dominance should continue to be muted for now.
As you can imagine, there was a real change in sentiment. The put/call ratio, which has not been finalized as of this writing (because somehow the CBOE must be using an abacus instead of computers now!). The ratio was preliminary and at 71%. Readings over 70% are low, but not extreme. Readings under 70%, however, are extreme. I know that sounds funny for a few points to make a difference, but, oddly, that is the way it is. We have had several readings in the 70s, but it was the reading at 65% on Nov. 4 that gave us a short-term peak in the Russell 2000.
Prior to that, we have to go back to mid-January 2018 to have another reading under 70%, so you can see it does matter.
The other important metric would be if the equity put/call ratio comes in under 50%. It was 76% the day before the Fed meeting and 52% the day of the Fed meeting, so it is possible the reading finally slips below 50%, which last occurred mid-November, about a week before the post Thanksgiving whack.