Peak in New 6-Month Highs

Below is one of the many charts from this week’s Thrasher Analytics letter that was sent to subscribers on Sunday.

Last week’s letter looked at 3-month highs, this week I’m showing the percent of large cap stocks that have made a 6-month high in the last five days and also smoothing it with a 1-month average (blueline).

The smoothing average has turned down despite the new high in the Index. We peaked at 38% on the daily figure and on Friday the SPX had less than 20% of stocks having hit a 6-month high during the week. All that’s mattered as of late has been tech stocks and that’s what’s been making up the list of new highs.

These lower-highs can exist for an extended period of time without being ‘acknowledged’ by the market. For example, the 6-month high list peaked in Q2 2021 before seeing a major reaction in the Index in Jan. ‘22. We also have to keep an open mind to breadth improving and playing catch up, rising back to the 30s-40s.

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