Global Stock Indices Race to New Highs, but Not Confirmed by Measures of Market Breadth

Stocks continue to perform well here, but with little confirmation from breadth measures. We noted the other day here the divergence between lower levels of new 52 week highs and stock indices near all-time highs. Given the rally yesterday, we thought we'd provide a quick mid-week update. We again notice the same divergence between lower levels of new highs (this time over the last 200 days) and rallying stock indices. The divergence is most pronounced in North America, but can be seen in Europe and Asia as well. Rallies to new cyclical highs that take place on dwindling breadth have in the past coincided with intermediate or major tops in stock markets. Note, however, this is not a timing tool because these types of divergences can persist for weeks or months before they are resolved one way or another.