Key Points
- NYSE Advance/Decline Line Makes a New Low
- NYSE New Lows Continue to Trend Higher
- S&P 500 Metrics Improve on the Week
- Short-Term Metrics Spike for Small Caps
- NASDAQ 100 Data has Room for Improvement
NYSE Breadth
The NYSE Advance/Decline line remains in a downtrend, moving to a new low for the cycle on Monday despite the S&P 500 holding support at the 4,200 level. The A/D line continues to trade below the declining 50-day moving average, as does the S&P 500.
The five-day moving averages of issues on the NYSE making new 52-week and six-month lows have been moving higher, meeting/exceeding the peaks from earlier this year. While the metrics have declined over the past two days, bulls want to see readings consistently below 5% to have conviction that rallies are anything more than countertrend in nature.
The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs have come under pressure over the past two weeks, trading near their lowest levels of the year.
The percentage of NYSE issues trading above their respective 200-day moving averages rose to 25% this week vs. 23% last week. The small increase has done nothing to change the bearish trend that has gripped this indicator since early 2021. At the same time, the S&P 500 is below a flat 200-day moving average.
The percentage of NYSE issues trading above their respective 50-day moving averages rose to 32% from 25% last week. While the improvement is welcome, there is still more that needs to be done to change the declining trend since November. The S&P 500 remains below its 50-day moving average.
The percentage of issues on the NYSE trading above their respective 20-day moving averages has moved up to 37% this week from 17% last week. Yesterday’s spike is similar to others that we have seen from depressed levels, but there is more work to be done. The S&P 500 also remains below its 20-day moving average.
S&P 500 Breadth
Breadth metrics for the S&P 500 have improved over the past week.
- Advance/Decline Line: Oscillating around the 50-day moving average.
- Percent Above Their 200-Day Moving Average: 40% from 41% last week.
- Percent Above Their 50-Day Moving Average: 46% from 33% last week.
- Percent Above Their 20-Day Moving Average: 44% from 16% last week.
Small Cap Breadth
Breadth metrics for the S&P 600 Small Cap Index improved on the week.
- Advance/Decline Line: Still in a downtrend below the 50-day moving average.
- Percent Above Their 200-Day Moving Average: 31% from 25% last week.
- Percent Above Their 50-Day Moving Average: 35% from 20% last week.
- Percent Above Their 20-Day Moving Average: 45% from 13% 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: 26% from 22% last week.
- Percent Above Their 50-Day Moving Average: 37% from 29% last week.
- Percent Above Their 20-Day Moving Average: 45% from 12% last week.
Take-Aways:
There was some improvement in the breadth metrics that we track this week, rebounding slightly from the depressed levels that were seen in the previous week. However, most metrics remain below levels that we would want to see to have confidence that rallies in the equity markets are more than simply countertrend bounces.
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