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Take-Aways:

Breadth metrics were mixed on the week but have generally held on to the improvements that we have been highlighting in these note for the past two weeks. However, the current breadth dynamics are not supportive of a sustained move above the 3,900 level for the S&P 500. We need to see more bullish breadth across the board to have confidence that rallies will have staying power.

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NYSE Breadth

The NYSE Advance/Decline Line is holding above the 50-day moving average as the S&P 500 tests its moving average. Continued improvement is needed from the A/D Line if the S&P 500 is going to be able to break above the 3,900 level that we have been highlighting.

The five-day moving averages of issues on the NYSE making new 52-week and six-month lows have moved slightly higher this week. We want to see these metrics maintain a downtrend as the index moves through 3,900.

The five-day moving averages of stocks on the NYSE making new six-month and 52-week highs have moved higher again this week. Recent strength in these metrics has taken them above the August peaks, and equity bulls want to see a continued trend to the upside.

The percentage of NYSE issues trading above their respective 200-day moving averages moved to 24% this week from 23% last week and remains in a downtrend. The S&P 500 remains below its 200-day moving average. This metric will take time to reverse.

The percentage of NYSE issues trading above their respective 50-day moving averages moved to 44% from 38% last week. The S&P 500 is fighting with its 50-day moving average after fading from the 3,900 level that we have been highlighting.

The percentage of issues on the NYSE trading above their respective 20-day moving averages stands at 58%, down from 60% last week. The index is testing its 20-day moving average, a key measure of the short-term trend.

S&P 500 Breadth

Breadth metrics for the S&P 500 were mixed over the past week.

  • Advance/Decline Line: Moving above the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 35% from 32% last week.
  • Percent Above Their 50-Day Moving Average: 58% from 49% last week.
  • Percent Above Their 20-Day Moving Average: 66% from 73% last week.

Small Cap Breadth

Breadth metrics for the S&P 600 Small Cap Index were slightly weaker on the week.

  • Advance/Decline Line: Above the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 37% from 37% last week.
  • Percent Above Their 50-Day Moving Average: 58% from 60% last week.
  • Percent Above Their 20-Day Moving Average: 57% from 71% last week.

NASDAQ 100 Breadth

Breadth metrics for the NASDAQ 100 were mostly stronger over the past week. 

  • Advance/Decline Line: Below the 50-day moving average.
  • Percent Above Their 200-Day Moving Average: 24%, from 24% last week.
  • Percent Above Their 50-Day Moving Average: 48% from 35% last week.
  • Percent Above Their 20-Day Moving Average: 58% from 58% last week.
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