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Key Points

  • NYSE Advance/Decline Line Stalls at the 50-Day Moving Average
  • NYSE New Lows Remain Near Their Lows
  • S&P 500 Metrics Were Mixed
  • Small Cap and NASDAQ 100 Data Improves
  • The Index Still Has Not Responded

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NYSE Breadth

The NYSE Advance/Decline is beginning to stall at the declining 50-day moving average as the S&P 500 does the same. The A/D Line has not been able to meaningfully build on the breadth improvements that we have been citing over the past few weeks, something that is needed if the index is going to break above resistance near 4,200.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows remain depressed. This is an encouraging sign for equity bulls as these metrics have not increased as the index has stalled below its 50-day moving average. Both metrics remain below 2%.

At the same time, there has been a slight increase in the five-day moving averages of stocks on the NYSE, making new six-month and 52-week highs. The moving averages are not yet above the peaks seen earlier this year, but continuous improvement here would increase the odds that the S&P 500 will break above 4,200.

The percentage of NYSE issues trading above their respective 200-day moving averages rose to 22% this week, flat vs. last week. This indicator remains in a downtrend as the S&P 500 trades below its 200-day moving average.

The percentage of NYSE issues trading above their respective 50-day moving averages rose to 43% from 38% last week. The improvement is encouraging, but the metric remains below 50% as the S&P 500 trades below its 50-day moving average.

The percentage of issues on the NYSE trading above their respective 20-day moving averages has moved to 72% this week from 70% last week. Recent readings have eclipsed prior highs for the year. The S&P 500 is holding above its 20-day moving average.

S&P 500 Breadth

Breadth metrics for the S&P 500 were mixed over the past week.

  • Advance/Decline Line: Holding above the 50-day moving average from above.
  • Percent Above Their 200-Day Moving Average: 31% from 32% last week.
  • Percent Above Their 50-Day Moving Average: 34% from 31% last week.
  • Percent Above Their 20-Day Moving Average: 67% from 70% last week.

Small Cap Breadth

Breadth metrics for the S&P 600 Small Cap Index mostly improved on the week.

  • Advance/Decline Line: Breaks above the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 28% from 26% last week.
  • Percent Above Their 50-Day Moving Average: 45% from 40% last week.
  • Percent Above Their 20-Day Moving Average: 73% from 76% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 moved higher over the past week. 

  • Advance/Decline Line: Holding above the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 21% from 18% last week.
  • Percent Above Their 50-Day Moving Average: 32% from 27% last week.
  • Percent Above Their 20-Day Moving Average: 75% from 73% last week.

Take-Aways:

Breadth metrics mostly improved over the past week, building on the improvements that we have been calling out of late. Despite this, only Small Caps have been able to break above key resistance levels (see yesterday’s note). While breadth improvements are encouraging for equity bulls, they are largely just a data point until the indexes can reverse their downtrends and begin to move higher.

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Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.