The data tell you that we are late in the bull market. They don’t tell you that it is over. Let’s look at the market’s strength in January and then reassess at that point.
– Phil Roth, Chief Technical Analyst, Miller Tabak, quoted in E.S. Browing “Bull Market Shows Signs of Aging”, The Wall Street Journal, December 7, C1
Interesting piece of technical analysis by E.S. Browing on the front page of today’s Money & Investing section in the WSJ. The main point is that while the big indexes have continued to post new highs in recent weeks, smaller stocks have not kept pace. This is important because small stocks led the rally from the March lows and this kind of shift is often considered to signal the late stages of a rally.
Another important point from the piece is the absence of volume during the last three weeks. Trading in NYSE listed stocks has averaged 5.6 billion shares a day in 2009. But volume has surpassed 4.7 billion shares only once in the last three weeks – this past Friday when 6.2 billion shares traded hands in the wake of the better than expected November Jobs Report.