Last week, we highlighted improvements in the breadth picture for the market. This week, we explore some developments in the S&P 500 which have caught our attention. The index closed above 4,000 yesterday and is now in a short-term uptrend. The Advance/Decline Line has broken above short-term resistance as new lows have trended lower. Finally, the percentage of stocks more than 10% and 20% off their highs have been moving to the downside. This sets the stage for an incrementally bullish environment.

S&P 500

The S&P 500 pushed through an important level yesterday, closing above the 4,000-mark. This gives a higher high and a higher low since a bottom was made on June 17th. This provides an opportunity to become incrementally bullish above the 4,000 level while managing risk on the move below 3,800.

Advance/Decline Line

As the S&P 500 pushes through the important 4,000 level, we also note that the Advance/Decline line for the index has made a higher high. The A/D Line has moved up and through the interim June/July peaks after making a slightly higher low on July 14th.

New Lows

New Lows have been trending to the downside since peaking in June. The 10-day moving averages of S&P 500 stocks making new six-month and 52-week lows are both below 3%.

Stocks in Correction or Bear Market

The percentage of stocks in the S&P 500 that are trading more than 10% and 20% off their highs have been declining since the June peak.

*Due to travel plans, we will publish on a modified schedule next week.

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.