Latest on S&P 500 Daily Breadth Monitor

As the long term Tick16 index is staying in the bullish zone, and that the short term Tick16 has moved away from the long term index for some time already, the market is staging yet one more up leg in the coming 1 to 2 weeks.

Historically, if this move failed to produce a higher high in the short term Tick16 index against the swing high it made back in late Dec 2010, an important sell signal will be triggered.

At the same time, notice how funny the 3-day Advance Issues has been behaving since early December. It simply stayed above the 50% area and bounced off 50% whenever it dropped slight below. That is the classic Christmas rally pattern when there is almost no participants and the controlling parties do not intend to lower the price level for specific purpose (e.g. option expiration target level).

The first break of this pattern of bouncing off 50% area will signal the end of this rally.

I am monitoring the development of these 2 breadth indicators closely. When they move in sync and produce the signals, they are usually the most important tops and bottoms of the year.

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