Waiting on Cumulative Breadth

Whenever the equity market is recovering from a correction, it is always comforting when you get a situation where breadth (as measured by the S&P 500 cumulative A/D line) leads the market higher.  There have been numerous periods during this bull market where the actual market was not yet trading to new highs, but breadth was.  In these situations, you could be reasonably confident that it was only a matter of time before price followed suit, and invariably it did.

In the current recovery off the June lows, breadth (lower chart) has been expanding with price (top chart), but we still have not gotten to the point where breadth is leading price.  Just as the overall market has yet to take out its May and April highs, so too has breadth failed to make a new high.  The fact that breadth has not yet made a higher high is not necessarily a negative per se, but it would certainly make the outlook more positive if breadth could take out those highs from May.