Refinements on Breadth Divergence

By Lawrence G. McMillan

In the April 30th Hotline, we noted that “stocks only” cumulative breadth did make new all-time highs twice recently.  Those two dates were April 15th and April 23rd.  It has not made another new all-time high since then, although it is only about 1,700 issues below its high right now – so another strong upside day today could produce another new all-time high for cumulative breadth.

The new highs remove the official “negative divergence” tag that had existed since last July.  That is, $SPX was repeatedly making new all-time highs since last July (about 40 times), while “stocks only” breadth didn’t make any new highs until those two recent dates.  But in reality cumulative breadth is still at about the same level it was last July, while $SPX is much higher.  Isn’t that still a negative divergence?

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