This is What Will Finally Kill The Stock Market Rally

This is What Will Finally Kill The Stock Market Rally

Posted On August 7, 2020 3:52 am

The leaders have been powering this market higher for a long time. The distance between the generals and the soldiers once thought to portend a market top, is as wide as it has ever been.

Market participants have been having the same discussion for the last 5 years.

At this point any chatter about lousy breadth sounds like boy who cried wolf talk, so please forgive me for going there again, because what happened last week is truly remarkable.

Jonathan Krinsky wrote:

The Nasdaq Composite (CCMP) closed up 1.49%, while the Nasdaq A/D line was -971. To put that in perspective, since 2004 (as far back as we have data) there has only been one other day where the CCMP was up at least 1.49%, and there were more decliners than advancers. That was 4/16/20 which was +1.66% with the A/D line -319.

Looking at it the other way, there have been 645 days since 2004 when the CCMP had at least 971 net decliners. Prior to Friday, the best performance for the CCMP on those days was +0.67% (6/10/20). The second best day was +0.53% on 7/9/20. Put another way, the top three most lopsided breadth/performance days in the last 16 years have come in the last 7 weeks.

So, the question you might be asking is, does any of this matter?

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Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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