Stock market internals suggest investors are exhibiting panic-like buying behavior as the market indexes rally, according to the Arms Indexes of both major exchanges. The Arms is a volume-weighted breadth measure that compares the ratio of advancing stocks to declining stocks to the ratio of advancing volume to declining volume, in order to gauge the intensity of the market's move. The Arms tends to fall below 1.000 when the market rallies, and many technicians believe a decline below 0.500 implies panic-like buying of rising stocks. In afternoon trading on Friday, the NYSE Arms was at 0.410 and the Nasdaq Arms was at 0.313. On the NYSE, advancers led decliners by a 3.97 margin while advancing volume outnumbered declining volume 9.69 to 1. On the Nasdaq, advancers outnumber decliners 3.37 to 1 and advancing volume topped declining volume 10.77 to 1. Meanwhile, the S&P 500 rallied 2.2% and the Nasdaq Composite climbed 3.6%.
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