We only have 7 trading days left of this current breadth thrust regime.
That's Monday week!
The breadth thrust regime I am talking about is when 55% or more of the S&P 500 stocks are at 20-day highs, and once this is triggered, the regime lasts one year!
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what the chart shows:
The gray shading highlights the breadth thrust regime.
The black line in the bottom panel shows the percentage of S&P 500 stocks at 20-day highs.
The red line in the bottom panel is the trigger for a breadth thrust.
The blue line in the top panel is the S&P 500 index price.
The Takeaway: A breadth thrust regime points to healthy leadership conditions and indicates that the stock market may more easily move up and to the right.
I rely heavily on the breadth thrust regime. It’s not an all-clear signal or a guarantee that the market will rise, but it does contribute to my weight of evidence approach.
The past performance of this breadth thrust is impressive. Over 95% of the time, a year later, the markets are, on average, up over 15%. The most recent breadth thrust regime has been a positive factor for stocks, gaining over 30% during this period.
So, the future may become challenging if we do not see another 20-day high breadth thrust.
Will we see a breadth thrust and a regime reset soon?
