Issue Breadth Numbers Signal "Shock Market" Trouble Ahead
Issue Breadth Statistics are the single most reliable indicator of what is going on in the stock market --- daily, monthly, annually, whatever.
Clearly, if more issues are going up in price more often than down, most of the time, for a meaningful period of time, so should the Equity Bucket of the investment portfolio. Historically, NYSE Issue Breadth (History) have never been individual-equity-only statistics, and today, they count more derivative "products" than anything else.
IGVSI "breadth statistics" signal changes in direction within the Investment Grade Value Stock universe alone --- all CEFs, ETFs, REITs, and preferreds (and individual issues that are NOT investment grade) are excluded. Current IGVSI Issue Breadth Statistics allow MCIM investors to look inside our index to obtain a better feel for what has been going on.
Cumulative issue breadth figures were negative from June '07 through February '10 --- roughly thirty-three months, and a longer than usual correction. In March '09, we soared into the black and the up trend regained momentum in through November --- perhaps the most powerful extended rally since the one that ended abruptly in 2000.
Only One Negative Month In 2013, BUT the flight from quality has begun!
We've now had nearly 5 consecutive years of positive issue breadth ---- and the past ten months have been the stongest ever. I doubt, looking back, that you would be quick to find another period that exhibited this level of upside strength.... eventually, all rallies run out of gas.
From an issue breadth standpoint, the rally has been weakening since August... and issue breadth has always been the very best IGVSI correction warning system. The flight from quality is in full swing.
The only remaining question is: When Will The Party End?
Your equity portfolio should be well above financial crisis lows, and with significant cash available for correction opportunities --- MCIM portfolios have most likely been outperforming MPT portfolios for over forty years, because of "preparation stage" strategies.
Income portfolios have corrected just under 20% since the ATH achieved on 11/30/2012.
Next Statistic Stop: The Investment Grade Value Stock Expectation Analyzer.