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Key Points

  • NYSE Advance/Decline Line Holds in a Downtrend
  • NYSE New Lows Turn Higher Again
  • S&P 500 Metrics Improve Slightly
  • Small Cap Breadth is Also Better
  • NASDAQ 100 Breadth Stands Out

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NYSE Breadth

The NYSE Advance/Decline Line remains in a downtrend, below the declining 50-day moving average which has acted as resistance to rally attempts all year. The S&P 500 is also below its 50-day moving average, and we have yet to see a divergence that piques our interest.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows have turned higher after making a higher low in early June. The year has been characterized by an inability for these metrics to sustain low readings for enough time to give the bulls a fighting chance. That dynamic is still at play.

There is nothing new to highlight as it relates to the five-day moving averages of stocks on the NYSE making new six-month and 52-week highs. Both metrics are below 1%, hugging the bottom of the chart as the bear market persists.

The percentage of NYSE issues trading above their respective 200-day moving averages fell to 11% this week from 12% two weeks ago. The S&P 500 remains below its 200-day moving average which is now moving lower. The damage that has been done to long-term trends will take time to repair.

The percentage of NYSE issues trading above their respective 50-day moving averages rose to 26% from 12% two weeks ago. The index remains below a declining 50-day moving average.

The percentage of issues on the NYSE trading above their respective 20-day moving averages rose to 40% this week from 13% two weeks ago. The S&P 500 is testing its 20-day moving average from below but remains in a downtrend for now.

S&P 500 Breadth

Breadth metrics for the S&P 500 improved over the past two weeks.

  • Advance/Decline Line: Holding below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 19% from 15% two weeks ago.
  • Percent Above Their 50-Day Moving Average: 26% from 5% two weeks ago.
  • Percent Above Their 20-Day Moving Average: 48% from 7% two weeks ago.

Small Cap Breadth

Breadth metrics for the S&P 600 Small Cap Index were mostly stronger over the past two weeks.

  • Advance/Decline Line: Failing at the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 14% from 13% two weeks ago.
  • Percent Above Their 50-Day Moving Average: 30% from 14% two weeks ago.
  • Percent Above Their 20-Day Moving Average: 42% from 12% two weeks ago.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 improved over the past two weeks. 

  • Advance/Decline Line: Regains the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 15% from 8% two weeks ago.
  • Percent Above Their 50-Day Moving Average: 42% from 10% two weeks ago.
  • Percent Above Their 20-Day Moving Average: 59% from 14% two weeks ago.

Take-Aways:

Breadth metrics have improved slightly over the past two weeks, but we are hard pressed to make a strong bullish case just yet. This year has seen many false starts in the breadth category that have ultimately amounted to nothing more than bull traps. We are still looking for sustained improvements. On a more upbeat note, NASDAQ 100 breadth stood out again, something that we began to highlight in this note two weeks ago. 

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