Stocktake: Stock market ascent has been dizzying

The S&P 500 is up more than 25 per cent this year, and the rally shows no signs of slowing. In fact, the recent ascent higher has been especially dizzying. Early last week, the index closed at a new all-time high for the eighth consecutive day – the longest streak since June 1997, notes LPL Research's Ryan Detrick.

Daily gains have become routine, with the S&P advancing in 17 of the previous 19 days. The last time that happened, added Detrick, was in 1971.

Technology stocks have led the market higher, but the rally has been broad. The percentage of stocks trading above their 50-day moving average is the highest since May.

In technical terms, each of the four major US indices – the S&P 500, the Dow Jones, the Nasdaq and the small-cap Russell 2000 – was trading at extreme overbought levels last week, notes Bespoke Investment. The Russell 2000 was 3.2 standard deviations above its 50-day average – the most elevated reading in 30 years.

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The S&P 500’s winning streak finally ended last Tuesday and stocks soon retreated further. Some kind of consolidation or pullback isn’t surprising given the pace of the gains, but the bull market is clearly alive and well.