July 7

While I promised not to complain about this rally until we reached a maximum overbought, I feel I must at least discuss the stocks at new highs. This statistic is very disconcerting.

The raw data show this statistic is having a great deal of trouble surpassing its April peak reading of 173. Yesterday we saw 155 stocks make new highs, which is heading in the right direction but makes me wonder why during this great bull run we've seen since October, stocks have not been able to manage a reading at least over 200. (In most other healthy bull markets, we typically would have seen at least 300 new highs by now.) And of course, I don't need to tell you how many of those 155 stocks at new highs turned around and were lower on the day.

Now, when we look at this indicator on a 10-day moving average, we see it's heading in the right direction as well (up), but it too has not surpassed its April high and the April high did not surpass the January high. Fewer and fewer stocks making new highs means a narrower and narrower market.

Since it takes some time for the 10-day moving average to roll over, the market still has a shot at improving this statistic and thus showing us that stocks have staying power once they reach a new high. If it doesn't improve, then it's telling us stocks are having a hard time sustaining their highs, and that is not a good sign.

New Highs and New Lows

Overbought/Oversold Oscillator

Cumulative Advance/Decline Line

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at