Shorter-term measures, however, tell a different story though and suggest weakness in the coming months.
For instance, only 31% of the 147 sub-industries in the S&P 1500, which covers more than 90% of the total market capitalization in the U.S. stock market, traded above their 50-day average through Thursday, down from 90% on May 7, data from Lowry Research shows.
Fewer new highs among stocks are like a canary in a coal mine: They're a signal of how market conditions may change. This implies that a decline in the stock market may be approaching, analysts say.
Through Tuesday, it’s been 293 calendar days since the S&P 500 has gone without a drop of 5% or more, according to CFRA. That bucks a historical trend. Since World War II, the average is 178 calendar days.
The stock market typically sees about three 5%-plus falls a year on average. That makes the market more vulnerable in the near term following some signs of investor complacency, analysts say.
No one knows for sure when the next significant decline will be, but so-called market "technicians" monitor these clues to gauge when the trend may start to change.
The lack of breadth in the stock market is concerning to some analysts in the near term. If only a handful of sectors are driving the market’s advance, then analysts become more skeptical about the trajectory of the market.
If you have a carriage that is pulled by 20 horses, it has a greater likelihood of going faster and farther than one that’s being pulled with just two horses, Stovall explained.
Send an email
