As we mentioned in today’s Sector Snapshot and yesterday’s Chart of the Day, breadth for the S&P 500 has ripped higher recently. In the charts below, we show the price and cumulative advance/decline (AD) lines for each of the eleven sectors and the S&P 500. The cumulative advance/decline line measures the daily number of advancers minus decliners within a sector or index over a given time frame. Bulls want to see this reading make new highs when the index or sector’s price makes new highs. Right now, every sector but Communication Services and Energy is seeing new highs in the cumulative AD line. Three sectors have seen their cumulative AD line make new highs this week even though the index’s price has not yet made a new high — Consumer Discretionary, Financials, and Industrials. That’s a hugely positive divergence.  

(Click on image to enlarge)