What is Market Breadth Telling Us ?

During the past few years, I have referred to market breadth as one of the more important metrics of the stock market’s health. As we close in on new highs in the cumulative advance-decline line, it is time to revisit this internal indicator.

As the chart below shows, the Standard & Poor’s 500 Index has rallied from its October lows. But for the past few months it has been unable to break out.

S&P 500 chart

Source: Bespoke

The technical analysts at Lowry Research note that “Although the major price indexes remain at the upper boundary of their respective multi-month trading ranges, the current character of the market . . . still appears to suggest a sustained and decisive upside breakout from the trading range is unlikely over the near term.”

The optimistic description of this in lay terms?: The market is taking a breather.


Continues here: The Reasons for a Meandering Market



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  1. Concerned Neighbour commented on Apr 23

    I would argue it doesn’t matter what it tells us. What matters is whether central banks are keeping the spice flowing. I really don’t think they’ll ever let it fall again. It’s coordinated pumping like we’ve never seen before.

  2. RW commented on Apr 23


    (that bark was mainly one of rueful recognition btw).

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