Narrowing Market Breadth: Stock Picking Takes On Added Significance

Hickey and Walters (Bespoke) submit: Just as the S&P 500 has now staged two unsuccessful attempts to take out the highs reached in June, small cap stocks (S&P 600) have also run into headway over the last several weeks. Looking at the cumulative advance/decline line of both indices also shows that each successive rally has been accompanied by narrower breadth (less stocks going up).

While narrower breadth does not necessarily mean the overall market cannot keep rising, it does imply that stock picking will take on added significance going forward.

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