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Take-Aways:

Once again, this week, we find it hard to make a strong bullish case based on breadth. The “thrusts” that appeared during the summer rally have not produced the types of follow-throughs that we want to see in the equity market. In the meantime, A/D Lines have all crossed back below their respective 50-day moving averages, while the S&P 500 has done the same. Risk management remains the biggest priority for investors in this environment.

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NYSE Breadth

The NYSE Advance/Decline Line has broken below the 50-day moving average as stocks have come under pressure over the past few weeks. The index remains below its 50-day moving average. Given these dynamics, the bull case is hard to make.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows have both continued to move higher over the past week. Should weakness in equities persist, bulls want to see these metrics make a lower high relative to June.

The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs have continued to move lower this week. Both metrics are now below 1%.

The percentage of NYSE issues trading above their respective 200-day moving averages held at 21% this week. The S&P 500 remains below its 200-day moving average. The bears still control the long-term trend.

The percentage of NYSE issues trading above their respective 50-day moving averages moved to 37% from 40% last week. The S&P 500 is below its 50-day moving average.

The percentage of issues on the NYSE trading above their respective 20-day moving averages stayed at 17% this week. The S&P 500 closed below its 20-day moving average.

S&P 500 Breadth

Breadth metrics for the S&P 500 have improved this week.

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 31% from 26% last week.
  • Percent Above Their 50-Day Moving Average: 47% from 40% last week.
  • Percent Above Their 20-Day Moving Average: 15% from 5% last week.

Small Cap Breadth

Breadth metrics for the S&P 600 Small Cap Index have weakened this week.

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 23% from 26% last week.
  • Percent Above Their 50-Day Moving Average: 30% from 40% last week.
  • Percent Above Their 20-Day Moving Average: 6% from 9% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 have mostly weakened this week. 

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 22% from 26% last week.
  • Percent Above Their 50-Day Moving Average: 36% from 40% last week.
  • Percent Above Their 20-Day Moving Average: 14% from 9% last week.

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