The recent market strength has been fairly broad on a market capitalization basis. Many stocks from different sectors, moving the same way, and driving multiple indexes together. Today, because so many indexes are weighted towards technology and telecommunications, they are acting in similar fashion. We believe that when stocks of much different size are moving higher together, rather than just large cap techs moving higher, it is more healthy from a technical standpoint. Whether this is a positive or negative for the entire stock market over the long term is uncertain, but volatility in these different size indexes will sure be much greater.
More issues are now in uptrends with a majority of stocks in bases.
Of the stocks currently tracing out bases, more issues continue to move into the top of their bases, preparing to breakout. For now, rapid growth is king and that is where the money continues to flow. The major indexes should move higher over the next month or so but a return to massive runs witnessed earlier in the year is probably not in the cards. Business Week Online may receive a share of any fees you pay for services. The McGraw-Hill Companies Inc. All rights reserved.