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Over the past few weeks, we have been highlighting that breadth has become incrementally bullish. That trend continues this week as the S&P 500’s Advance/Decline Line makes a higher high and leads the index in moving toward the top of the one-year range. Yesterday marked an 80% upside day for NYSE breadth while volume breadth clocked in above 90%. Finally, today could trigger a bullish signal should the TRIN close below 0.50 as it did yesterday.

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The S&P 500 closed above the 4,200 level that we have been highlighting; however, it is the advance/decline line that will be in focus here. The A/D line has made a higher high, breaking the downtrend that has been in place for most of 2022. Additionally, the A/D Line has seen its one-year range position move above 0.80 (the high of the year is 1.00, and the low of the past year is 0.00). At the same time, the one-year range position for the index is below 0.50. The A/D Line is leading to the upside.

NYSE Upside Breadth looks at advancing issues as a percentage of advancing and declining issues. This metric was over 80% yesterday, and we have begun to see a clustering of readings greater than 80% over the past six weeks.

NYSE Volume Breadth is like the Upside Breadth metrics above but incorporates volume. Yesterday gave the bulls a reading above 90%.

The Arms Index or TRIN registered a reading below 0.50 yesterday. This sets the stage for today to be a signal day as back-to-back readings below 0.50 have a history of being a bullish set-up for the S&P 500.

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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.