The funny thing is it stopped right at the under side of the lower red channel line again. What do you think happens now? Today was a very rare day. Check out the current breadth chart.
Both the McClellan oscillator and the 10 DMA breadth lines are still negative. Today ended with only 61% NYSE stocks positive after starting out about 80%. That is a very poor thrust day. They usually are in the 67% and above category when they are the start of big move. Making a new bull market high with the indicators in this chart negative is extremely rare. Last April it almost happened as the green line was 1 point above the red line just before that spring's sell off. The last time it actually happened was in July 2007. There were two occurrences that year. Here is the chart with yellow arrows marking the days.
Going back in time the next occurrence was in 1999. Here is the chart.
Needless to say it is not a very good thrust day. In the last 14 years there is no instance of this kind of day leading to a blast higher for weeks on end. It usually chops around or sells off. History shows many important turning points in late July and early Aug. If this does turn out to be a top the sell off could be a dozy.
Now we wait and see what happens. Will SPX be able to stay above 1700? Round numbers are often a place people decide to take profits. The way the breadth deteriorated today it was clear some people were doing just that. It is a question of how many rally chasers there are relative to profit takers. I don't know how to determine that without seeing what happens.
Bob
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