Instead of writing something to the extent that breadth is still bad, which everyone already knows, we are going to introduce a concept that lends itself to further testing and analysis. Bullish breadth divergences would be a sign that markets are nearing a bottom. Today we are going to define a divergence as when the Advance/Decline Line is above the 20% mark of its annual range while the respective index is still below the 20% level. In all cases, there has not been a divergence yet. However, this framework will serve as an objective determination of a divergence when it does take place.
New York Stock Exchange
The A/D Line for the NYSE is near the bottom of its yearly range, as is the NYSE Composite Index. There is no divergence here.
S&P 500
Both the A/D Line and the index are under the 20% threshold, but the A/D Line has been perking up of late. Watching, but not yet a divergence.
S&P 400
Both the A/D Line and the index are below 20% for the annual range. No divergence in sight.
S&P 600
There is not a divergence here either.
NASDAQ 100
The NASDAQ 100 is close to giving us a divergence but is not quite there.
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