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Take-Aways:

Last week, we noted that the breadth metrics across the U.S. equity market were not impressive and that odds favored a lower low for the S&P 500. Thus far, that thesis has been playing out. Over the course of the past week, metrics have worsened, and the S&P 500 has been making new lows for the current bear cycle. We are especially intrigued by the Advance/Decline lines, which are making new lows with price, as this provides a measure of confirmation to the trends.

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NYSE Breadth

The NYSE Advance/Decline Line remains in a downtrend, below the 50-day moving average, and has made yet another cycle low this week. The S&P 500 has followed suit, trading below its 50-day moving average and made a new low for the cycle this week.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows have moved higher on the week but have not made new highs as the S&P 500 has traded to new lows on an intraday basis. As we mentioned in last week’s note, bulls want to see a less intense low by the S&P 500 to have confidence that downside is abating.

The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs have moved higher this week, but metrics are less than 1%. Note that the 52-week data remains in a downtrend since peaking in November.

The percentage of NYSE issues trading above their respective 200-day moving averages moved to 14% this week from 17% last week and remained in a downtrend. The S&P 500 remains below its 200-day moving average. The bears are still in control of the long-term trend as the index makes new lows this week.

The percentage of NYSE issues trading above their respective 50-day moving averages moved to 14% from 21% last week. The S&P 500 is below its 50-day moving average.

The percentage of issues on the NYSE trading above their respective 20-day moving averages stands at 23%, down from 36% last week. The index remains below its declining 20-day moving average.

S&P 500 Breadth

Breadth metrics for the S&P 500 declined on the week.

  • Advance/Decline Line: Below the 50-day moving average, made a new low for the cycle.
  • Percent Above Their 200-Day Moving Average: 15% from 20% last week.
  • Percent Above Their 50-Day Moving Average: 10% from 21% last week.
  • Percent Above Their 20-Day Moving Average: 20% from 45% last week.

Small Cap Breadth

Breadth metrics for the S&P 600 Small Cap Index were stronger this week.

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 19% from 23% last week.
  • Percent Above Their 50-Day Moving Average: 13% from 17% last week.
  • Percent Above Their 20-Day Moving Average: 37% from 48% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 were stronger this week. 

  • Advance/Decline Line: Below the 50-day moving average, made a new low for the cycle.
  • Percent Above Their 200-Day Moving Average: 13% from 15% last week.
  • Percent Above Their 50-Day Moving Average: 6% from 19% last week.
  • Percent Above Their 20-Day Moving Average: 18% from 53% last week.

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