In retrospect, you could have enjoyed the great ride in the stock market for the first few months of this year and then taken a sabbatical. We've had all kinds of camouflages to make us think that this year has been better than it has, but we're not buying it. In our opinion, the really good times peaked in February or March, and since then (if you haven't owned Apple, AT&T, or a few others) you've been treading water at best, just trying to get back to those good old days of February.
I know, it has been six long months since February, and if your memory is like mine, you have a hard time resurrecting the circumstances of that time. So let's review an interesting datapoint. Nothing shows the internal nature of the market better than the number of stocks making new highs.
In the chart above, you can see that the number of new 52-week highs for the stocks on all exhanges in the US actually peaked out as February was coming to a close. We've had two main cycles since then, with a definite weakness ending in May, and now we are in the second phase of declining breadth in the overall market. However, the indices themselves have had that residual effect - camouflaging the actual peak in "good times" for most investors.
Around February to April of this year, based on the P5 reading we received from our Psychology Composite, we guesstimated that the stock market would meander around and wait until the fourth quarter (around the time of the election) for the bull market to really get in sync again. Today, we're still sticking with that guesstimate.
If you are a subscriber to HaysAdvisory.com, click here to read our recent reports. If you would like to learn more about the research and commentary offered by Hays Advisory, click here.
Please see important disclosures at the bottom of this page.