“Never short a quiet market”. Tightest trading range in 40 years…and no deterioration in breadth. $SPY

Screen Shot 2016-09-01 at 9.09.31 PM

After coming back from what many considered the brink in February on expanding market breadth, the S&P500 made new all-time highs in June. Since then the market has traded sideways in the tightest consolidation range in forty years, working off an over-bought condition.

During this period, while many managers and investors have been reducing equity weightings and talking the market lower, breadth readings have been immune and have remained skewed solidly positive.  Of our short term indicators, percent of stocks with positive price momentum has pulled back from 72% in the S&P500 to 34% and now the market looks likely to be ready to make another push higher.