All the indices are trading at or near their all-time highs, and with Trump tweeting daily about how fabulous the stock market is on a daily basis, we should be enthusiastic about stocks across the board, right?
Wrong!
Actually the breadth is poor, and more importantly, the Street appears to be booking profits at breakneck speed.
This can be most clearly seen by the action on one of my favorite indicators – the T2108, which measures the percentage of stocks trading above their 40-day moving average.
Nine out of the last ten trading sessions, has seen an increased number of stocks drop below their 40-day moving averages, and since October 5th, when it peaked, it has only seen four days where it has move higher.
This is a problem for the stock market as a whole, because establishing new all-time highs on a daily basis will quickly be a thing of the past, unless this trend is bucked quickly.
Here is the T2108 Chart:
