It's not the first time (or the third time, or even the fifth time) it's been brought up, but in that the problem has yet to be solved, it's worth mentioning again. That is, this rally lacks the participation and interest it needs to be sustained.
The most prescient evidence to this end is once again the market's bullish and bearish volume, and the number of advancing and declining stocks. We'd ideally like to see a growing amount of buying volume as well as a growing number of stocks that end any given trading day with gains. Conversely, we'd like to see falling bearish volume, and fewer and fewer daily losers. It's this 'participation' in a rally that often indicates how strong the bullish undertow really is.
As the updated view of the NYSE's up and down volume and its advancers/decliners data shows, this rally is (still) not well supported.
Though things got off with a bang two Thursday's ago, bullish volume as well as the number of advancers have fallen every day since. And, the number of decliners as well as the amount of bearish volume has grown ever since. [The very last bars you see on the chart are Friday's bars, but bear in mind they're not reflective of a full day as of the time the image was made.]
It's not the only red flag we're seeing now either.
Interestingly, though the market indices themselves have all moved into record high territory, the number of stocks that have themselves hit new 52-week highs this week is oddly low. Only 238 names reached new-year highs on Thursday, down from the late-April peak of 289, which was down from the 347 that did so in early March, which was down from the 490 names that hit new 52-week highs in December. In light of the market's feat, we would expect the number of stocks reaching new records -- or at least 52-week records -- to climb. Clearly that number isn't doing that.
The implication is something that's been examined before... a handful of the market's very biggest names are doing the bulk of the market's bullish work. Everything else has been performing rather tepidly. That'll work for a while, but giants like Amazon (AMZN), Apple (AAPL) and Alphabet (GOOGL) can't do all of the heavy lifting forever. At some point, other names will have to chip in.
It's important to understand that a lack of bullish breadth (advancers) and depth (volume) isn't in itself a recipe for disaster. As the volume and advancer/decliner chart indicates, a lack of a consistent trend can simply mean a sideways market, or in this case, a modest upward drift. It's not like bearish volume and decliners are consistently bigger either. It's simply to say there's not a whole lot of faith in the rally as it stands. Traders are mostly on the sidelines, likely feeling stocks are reaching a valuation ceiling, and the economy isn't quite strong enough yet to support higher prices.
When that mood changes, it will be evident on the breadth and depth chart.