Breadth Update 11/5/2024

A Slight Rise in New 6-month Lows as Price Nears a 20-day Low

The breadth stat table below shows that bullish breadth has weakened to some of the lowest levels in the last 35 days while bearish data has risen. The S&P 500 is just a few points off its all-time high and while new high data has fallen, there hasn’t been a sustainable increase in broadening new low data. This week I take a look at an interesting chart of 6-month lows and the threshold that has often accompanied protracted declines in the equity market.

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Breadth Thrust Composite

A collection of multiple breadth thrust indicators based on different indices that incorporate price and volume to mark when extremely strong buying activity is taking place by the movement of individual stocks. When multiple of these thrusts occur in a short period of time, the reaction in the S&P 500 has historically been positive going forward.

No change from last week, the count remains at 0.

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Exhaustive Breadth Thrusts

While breadth thrusts are typically bullish for equities, when they occur does matter in the implication they can have for stocks. When we start seeing an increasing number of thrusts near market highs and not following pullbacks in price, they can be signs of trend exhaustion and in ambulance of buying vs. selling in the short-term. The Exhaustive Breadth Indicator is a composite of thrusts have historically been associated with this exhaustive type of short-term pullbacks in price when occurring at or near market highs.

The S&P 500 has continued lower since peaking with the +1 reading in Exhaustive Thrusts and is near a 20-day low. This is still below a threshold of +2 that has historically been significant, it is still of interest that we are seeing a price response to the +1 that we do have.