Advance Decline Line

On Balance Volume

 

Merrill Lynch’s  Mary Anne Bartels observes that market Breadth and Volume are confirming new S&P 500 recovery highs.

In a research note last night, Merrill’s Technical Research Analyst noted that:

“Market breadth is strong and the stocks only advance-decline lines continue to confirm new recovery highs for the S&P 500. A major complaint about last week’s breakout is the lack of volume confirmation. NYSE consolidated tape volume of
3.6bn shares was lackluster on the breakout, but our Volume Intensity Model and
on-balance-volume, which measure accumulation or buying are positive and
confirmed the new recovery highs. This confirmed break to the upside pushes out
a correction to spring but increases the risk for a deeper correction of 10-15%.”

She also observes that sentiment has gotten somewhat frothy as markets have become short term over-bought. These reflect possible pullbacks, but not the end of the cyclical rally.

 

 

Source:
Breadth & Volume Confirm Rally
Mary Anne Bartels
Merrill Lynch, March 11, 2013

 

 

Category: Markets, Technical Analysis

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5 Responses to “Bartels: Breadth & Volume Confirm Rally”

  1. mad97123 says:

    Consider Bob Farrell’s Rule Number 4 from this morning’s reading.

    Breakouts of directional trends are warnings – the corrections came soon thereafter.

  2. hangemhi says:

    “corrections come soon after”. The only problem is that “soon” can be 1 year after another 20% higher – see 2006 thru 2007 for a comparative to what may happen over the next year. Of course if that does happen the correction could look like ’08/’09

  3. Pantmaker says:

    The breakout itself is confirmation of the breakout.

  4. san_fran_sam says:

    “Pantmaker Says:

    March 12th, 2013 at 4:27 pm
    The breakout itself is confirmation of the breakout.”

    As reported by the Department of Redundancy Department

  5. jbegan says:

    Looks like the third leg of a continuing run to me. Whatever happens happens, but normally a third leg is equal in duration to the first leg.