Breadth Update 1/28/2025

Breadth Whipsaw with Mega Caps Driving the Daily Price Action

It’s been a very interesting breadth environment for U.S. equities. On Monday the index saw a -1.5% drop but 69% of stocks were positive on the day. Then on Tuesday the Index moved up almost 1% while nearly 70% of stocks were lower. The impact of the Mag 7 and most recently, just NVDA, have on this market is impressive. NVDA accounted for over 80% of the decline on Monday in the S&P 500 since it has a 7% weighting. The market continues to sit between key price levels with individual stocks whipsawing back and forward between being supportive of the uptrend to diverging from it. Looking at the table below we can see that 15 days ago less than 11% of stocks were above the 20-day MA to now over 80% are. While 35 days ago 72% of stocks were above their 200-MA until two weeks ago when less than 50% still were to 62% as of Monday.

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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.