— Dana Lyons (@JLyonsFundMgmt) November 13, 2020
Today’s Chart of the Day was shared on Twitter by Dana Lyons (@JLyonsFundMgmt). The S&P 500 closed at an all-time high for the first time in more than two months today, while the Russell 2000 closed at an all-time high for the first time in more than two years! Dana points out that the Value Line Arithmetic Index also hit an all-time high this week. This index is arguably a better barometer for Stocks than a cap-weighted index like the S&P 500. It more accurately reflects the performance of the “average” stock. Similar to the Russell 2000, the Value Line Arithmetic Index has made zero forward progress in the past two years. Why do we care about all-time highs? Because at all-time highs, there is virtually no overhead supply to prevent prices from moving significantly higher. Why do we care about all-time highs from this obscure index? Because it represents broadening participation and is further evidence that we’re in the early innings of a new bull market.