Wednesday, July 6, 2011

The Broadest Rally in Over a Decade

by Bespoke Investment Group

The charts below compare the performance of the S&P 500 to the cumulative breadth of the 24 major S&P 500 industry groups. Even though the S&P 500 is still 2% below its May 2nd high, last week's rally managed to carry breadth to new bull market highs (this was also the case for cumulative breadth of individual S&P 500 stocks). 

Last week's strength of group breadth was also notable given the fact that all 24 groups finished the day in positive territory on four different days. Looking back at data over the last ten years, we found that there has never been a period where all 24 groups were up on the day in four out of five trading days. In fact, prior to last week, there was never a period where all 24 groups were up on the day in even three out of five trading days. Who would have thought that in the week leading up to the end of QE2 as well as a long Summer weekend that the S&P 500 would have ended up seeing what was its broadest rally in at least a decade? 



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