Can It Get Much Worse
Than This?

by | May 12, 2022

Key Points

  • NYSE Advance/Decline Line Makes a New Low for the Cycle
  • NYSE New Lows Continue to Expand
  • S&P 500 Metrics Fall Across the Board
  • Small Caps Remain Weak
  • NASDAQ 100 Nears Washed Out Levels

NYSE Breadth

The NYSE Advance/Decline line remained in a downtrend and traded to a new low yesterday. The indicator continues to confirm the bearish price trend for the S&P 500. While not required for a durable bottom, bulls want to see the A/D Line make a higher low while the index makes a lower low to leave a bullish divergence in place.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows made a new high for the year yesterday. The actual percentage of stocks making new lows also made a high for the year on Monday. It is hard to make a case for a trend reversal when new lows continue to make highs.

The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs remain under pressure, trading near their lowest levels of the year.

The percentage of NYSE issues trading above their respective 200-day moving averages fell to 16% this week vs. 25% last week. This metric is now near its lowest levels in the past two years. The S&P 500 is below its 200-day moving average, which is beginning to roll over.

The percentage of NYSE issues trading above their respective 50-day moving averages fell to 10% from 32% last week. This metric is trading at its lowest level of the past two years as the S&P 500 trades below a declining 50-day moving average.

The percentage of issues on the NYSE trading above their respective 20-day moving averages has moved up to 8% this week from 37% last week. The S&P 500 is trading below a declining 20-day moving average.

S&P 500 Breadth

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

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 27% from 40% last week.
  • Percent Above Their 50-Day Moving Average: 14% from 46% last week.
  • Percent Above Their 20-Day Moving Average: 7% from 44% last week.

Small Cap Breadth

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

  • Advance/Decline Line: Still in a downtrend below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 15% from 31% last week.
  • Percent Above Their 50-Day Moving Average: 11% from 35% last week.
  • Percent Above Their 20-Day Moving Average: 11% from 45% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 improved this week.

  • Advance/Decline Line: Holding below the declining 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 13% from 26% last week.
  • Percent Above Their 50-Day Moving Average: 7% from 37% last week.
  • Percent Above Their 20-Day Moving Average: 3% from 45% last week.

Take-Aways:

The only good thing that we can say about the breadth picture is that we have nothing good to say about the breadth picture. Metrics have deteriorated across markets and timeframes. Some have moved to washed-out levels. 

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.