Key Points

  • New Lows on the NYSE Remain Depressed
  • NYSE New Highs are Looking for a Breakout
  • S&P 500 Metrics Improve for a Third Consecutive Week
  • Small Cap Breadth Turns Higher
  • NASDAQ 100 Data Impresses

NYSE Breadth

The NYSE Advance/Decline line has powered through the declining 50-day moving average, a potential positive for equity bulls. Interestingly, the S&P 500, also above its 50-day moving average, appears to be leading the A/D line. Normally those roles are reversed. The current environment sets up a possible divergence.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows remain below 4%. It is encouraging to see that these metrics have not rebounded after making lower lows last week.

The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs continue to trend higher. However, we have yet to see them break above their recent peaks. Equity bulls want to see this dynamic change.

As the S&P 500 moves through its 200-day moving average, the percentage of NYSE issues trading above their respective measures of long-term trend have increased again on the week, moving from 28% to 32%. Bulls want to see a steady improvement that breaks the downtrend and begins to work back toward the 50% level.

The percentage of NYSE issues trading above their respective 50-day moving averages rose to 50% from 40% last week, logging a third consecutive week of improvement. Ideally, the bulls want to see this metric above the 60% mark to indicate that a healthy majority of issues are in an intermediate-term uptrend.

The percentage of NYSE issues trading above their respective 20-day moving averages rose again on the week, moving from 57% to 71%. The S&P 500 remains above its 20-day moving average, and that moving average is trending higher.

S&P 500 Breadth

Breadth metrics for the S&P 500 have improved for a third consecutive week.

  • Advance/Decline Line: Powers through the declining 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 56% from 45% last week.
  • Percent Above Their 50-Day Moving Average: 68% from 47% last week.
  • Percent Above Their 20-Day Moving Average: 88% from 71% last week.

Small Cap Breadth

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

  • Advance/Decline Line: Above the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 42% from 38% last week.
  • Percent Above Their 50-Day Moving Average: 52% from 44% last week.
  • Percent Above Their 20-Day Moving Average: 63% from 49% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 improved again over the past week.

  • Advance/Decline Line: Rallies above the declining 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 45% from 36% last week.
  • Percent Above Their 50-Day Moving Average: 69% from 47% last week.
  • Percent Above Their 20-Day Moving Average: 97% from 77% last week.

Take-Aways:

As we enter the final trading day of the first quarter, breadth metrics continue to improve across major U.S. markets. For many, the improvements have entered their third week. This is a bullish dynamic for the equity rally playing out since the March lows.

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.