Yamada Flashes Yellow Light as Fewer U.S. Stocks Reach Highs

May 16, 2014 11:26 am ET

May 16 (Bloomberg) -- Fewer U.S. stocks hitting 52-week highs is a sign of concern after a five-year bull market, according to Louise Yamada, managing director at Louise Yamada Technical Research Advisors LLC.

Yamada, who uses charts and price trends to spot buy and sell signals, said she is “cautiously long” on the Standard & Poor’s 500 Index. Among companies listed on the New York Stock Exchange, there were 23 more that reached a one-year low than high yesterday, the most since February, according to data compiled by Bloomberg.

“We have yellow lights out there,” Yamada told Tom Keene and Michael McKee in an interview today on Bloomberg Radio’s “Surveillance.” “One thing that is concerning is the thinning participation. You’re starting to get less and less participation as the market moves higher.”

U.S. stocks were little changed today, with the S&P 500 heading for its first back-to-back weekly drop since January, after data showed consumer confidence unexpectedly fell this month. The gauge has retreated 1.4 percent since closing at a record on May 13 as losses in small-cap and Internet stocks spread to the broader market.