It's hard to say anything bad about a market that keeps making serial new highs.
But there is a tragedy unfolding right now…
It's the sheer number of people hanging back on the sidelines, just waiting for something bad to happen to the markets.
It's not just the permabears, either – those guys never participate in rallies. And it's not institutional investors managing monstrous amounts of money, who have to start moving months in advance.
Rather, it's the regular people who feel like the market's "just too high," or stocks are "too expensive," or that they "don't want to get in at the top."
For whatever reason, those unfortunate investors are missing out, needlessly, on one of the greatest rallies of all time.
Here's one picture I'd show anyone on the sidelines who's anxious about getting in right now…
A Two-Second Market Health Test
There aren't many surprises a market can throw at you. If you know where to look, you can see just about everything coming well in advance – especially declines.
And so, we go back to check up on market health to see if we notice any signs that markets are showing advanced signals of a significant drop.
The first place I normally look is at "market breadth." That's simply a measure of how many stocks are participating in an up move.
So the question becomes, as we make new all-time highs, are lots of stocks pulling on the oars? Or are we seeing just a few leading the way?
About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.