Summation Index Will Help Define All Clear Signal for the S&P 500

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In some of my recent writings in other forums, I have pointed to the Summation Index as a helpful signal to define an end to the recent correction on the S&P 500. The Summation Index is derived from the advance-decline line and is a measure of market breadth over the medium term. As one can clearly see in looking at the chart above, the Summation Index was negative for most of 2008 even before the stock market actually turned significantly downward in the fall. The rising Summation Index and subsequent move above "0" was also a clue that market internals were improving as the stock market bottomed in March 2009 and then turned rapidly upward. For the remainder of 2009 and most of 2010 the Summation Index has been positive...that is until the past two months. I think any upward move by the S&P 500 should be viewed with caution until we see confirmation of the breadth of the move with a positive reading on the Summation Index. Following this useful indicator in conjunction with price movement would have kept one safe from the recent false moves to the upside.