Stocks Making New Highs: The chart below shows the five-day average of the percentage of stocks at new annual highs, with the S&P 500 overlaid.
We can see that in 1997, the percentage of stocks at new highs reached well over 10% before collapsing in 1998 during a market pullback. However, the market quickly recovered and rallied to new highs again in early 1999. However, the percentage of stocks making new highs remained relatively low, and we all remember how that worked out.
This chart is portraying unequivocally bullish signs to me in the fact that each time the percentage of stocks making new highs hit the 12% mark, there were still significant gains to be made in the market. In 1997 when this occurred, there were still more than two years left in the bull market. The percentage of new highs reached that level again in 2003 and a few more times until early 2006. At that time, there were still about two years left in the bull market, as the market topped out in late 2007.