The rally that began a month ago has given little to complain about. Sure, the Russell 2000 and the Transports have lagged, but I have explained that they can lag as long as the breadth of the market doesn't get dragged down with them. So for the most part the last month has been good for the indicators and breadth has led the way upward.
Monday's rally was the first time since that low a month ago that I have complaints about breadth. For example, there have been days when the small caps and the transports stunk up the joint, but breadth stayed positive, so I ignored those two indexes. Monday breadth lagged the indexes and did so badly.
Let me put it in perspective. Last Wednesday, the S&P 500 closed the day down almost four points. Net breadth on the day was +300. That's pretty good, right? Monday the S&P closed the day up over 22 points. Net breadth on the day was +450. Not terribly impressive, is it?
Yet the overall cumulative advance/decline line made a new high, so I cannot complain about that. The McClellan Summation Index is still rising, so there are no complaints there, either. The 10-day moving average of stocks making new lows continues to decline, so we can't complain about that, too.
OK, so I'm complaining about one day of breadth. That's it. Should that one day turn into a trend, it will turn the indicators down. This is why I am alerting you. The number of stocks making new highs is still fewer than it was on June 20 (the peak reading so far). There is still some time until we reach an intermediate-term overbought reading for this to improve, but so far it hasn't.
Looking to sentiment, nothing special was seen in the put/call ratios for Monday (they were quite neutral) but the 10-day moving average continues to fall with the Equity Put/Call ratio's 10-day moving average, now under 60%, joining the total put/call ratio's moving average in being low.
Sticking with sentiment, the Daily Sentiment Index (DSI) for the S&P is now back to 85. Nasdaq is at 88. Readings over 90, and it's usually not a good time to buy anymore. Remember when Gold's DSI got to $96 a week ago?
To add to this, the DSI for the Volatility Index is now 20. A move toward single digits is extreme. It seems wrong to turn negative right now, because we're not yet intermediate-term overbought and most of the indicators are still going up, but Monday was the first time in a month I saw divergences on a new high.
Away from all of that, the utilities came down and tagged the uptrend line I drew in last week. I said last week I expected a bounce from there, and I still do.