Key Points
- NYSE A/D Line Continues to Deteriorate
- NYSE Trend Metrics Move Lower on the Week
- New Lows Remains Elevated on the NYSE
- S&P 500 Breadth Continues to Weaken
- Small Cap Breadth Fades from Last Week’s Improvement
NYSE Breadth
The Advance/Decline line for the NYSE remains below the declining 50-day moving average and has made a sharp move to the downside over the past week. Last week we wrote that the longer the A/D Line remains under pressure, the more likely support for the S&P 500 will break. That has begun to play out, with the index moving below the closing lows from October and January.
The five-day moving averages of issues on the NYSE making new 52-week and six-month lows is slightly lower than the levels seen last week. Spikes in the data have been trending lower since January as well. Bulls want to see these metrics continue to decline, but they remain stubbornly high.
The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs are moving to the downside after peaking at a lower high. Given the carnage under the surface of the market, it is reasonable to expect these metrics to be under pressure for some time.
As the S&P 500 breaks below its 200-day moving average, the percentage of NYSE issues trading above their respective 200-day moving averages remains in a downtrend. This week’s reading of 21% is down from 29% last week.
The percentage of NYSE issues trading above their respective 50-day moving averages clocks in at 20% this week, down from last week’s reading of 33%. The S&P 500 remains below the declining 50-day moving average.
The percentage of NYSE issues trading above their respective 20-day moving averages goes from being a bright spot to moving much lower over the past week. The current 22% level was down from over 50% last week. Readings closer to 10% have tended to mark local lows for the index, below its declining 20-day moving average.
S&P 500 Breadth
Breadth metrics for the S&P 500 have degraded further over the past week.
- Advance/Decline Line: Moves further below the 50-day moving average.
- Percent Above Their 200-Day Moving Average: 34% from 48% last week.
- Percent Above Their 50-Day Moving Average: 25% from 41% last week.
- Percent Above Their 20-Day Moving Average: 17% from 54% last week.
Small Cap Breadth
Breadth metrics for the S&P 600 Small Cap Index declined on the week.
- Advance/Decline Line: Below the 50-day moving average, breaking down.
- Percent Above Their 200-Day Moving Average: 32% from 43% last week.
- Percent Above Their 50-Day Moving Average: 23% from 46% last week.
- Percent Above Their 20-Day Moving Average: 28% from 73% last week.
Take-Aways:
Breadth metrics have weakened across the board as equities have come under pressure this week. Advance/Decline data remains under pressure for all markets, and new lows remain elevated on the NYSE. Interestingly, short-term trend data is not yet at levels that we would classify as washed out.
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