There has been much talk about the health of the current stock market rally, so let’s see what market breadth is telling us.

Short-term market breadth shows that the market is very overbought. This is clearly visible when we examine the number of S&P 500 stocks above their 5, 10 and 20-day moving averages. However, the 50-day version of this measure of breadth is still neutral, suggesting that we could see a continuation of the current rally after a short-term correction.

No one knows for sure whether this rally is the beginning of a new multi-year bull market or not, but chances are it isn’t.