In our note on May 26th, we highlighted the declines in new six-month and 52-week lows across major U.S. markets. Today, we look at new highs. While they have been improving, there is still work that needs to be done if the prevailing bearish market trends are going to have a chance to reverse. The most compelling data comes to us from the S&P Small Cap 600, an index whose relative strength we have been highlighting for the past few weeks.
NYSE Highs
The 10-day moving average of the percentage of stocks on the NYSE has been moving higher over the past few weeks. This metric has been in a downtrend since peaking in May 2021, and that remains the case now. However, when viewed in conjunction with the fact that new lows have been declining (see our note from May 26th), this can be seen as a bullish data point; if the moving average can reverse its downtrend while the S&P 500 breaks above 4,200, there could be support for a more meaningful advance in the equity market.
S&P 500 Highs
For the S&P 500, the 10-day moving average of new six-month and 52-week highs has increased slightly over the past two weeks. However, note that the increase has not been as strong as what we have seen in the NYSE data. The moving averages still have a lot of work to do to recapture the 2022 peaks.
S&P 400 Highs
Moving down the market cap ladder to the mid-caps, the 10-day moving averages of the percentage of stocks making new six-month and 52-week highs has been increasing of late. The improvements are gradual, and the 2022 peaks have yet to be eclipsed.
S&P 600 Highs
Continuing down the market cap spectrum, the 10-day moving averages of the new high data for the S&P Small Cap 600 are arguably the most compelling. The moving averages have broken above their April highs, the only market that makes this claim. Readers of our work know that we have been highlighting the improving relative strength for Small Caps, a view that is further supported by the new highs data.
NASDAQ 100 Highs
Finally, the data for the NASDAQ 100 paints a clear picture. The former market darling sports the worst metrics of the groups that we highlight here today. The 52-week data is approaching zero, and both moving averages are not close to threatening their April peaks.
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