Market breadth had been weak... However, it has significantly improved over the last week, with 50% of S&P 500 stocks reaching a 20-day new high.
However, this recent surge in 20-day new highs wasn't quite enough to trigger my favorite breadth thrust regime.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what it shows:
The black candlesticks in the top panel is the S&P 500 index price.
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 gray shading highlights when in a breadth thrust regime.
The Takeaway: The breadth thrust I am talking about is when 55% or more of the S&P 500 stocks reach a 20-day new high. Once this threshold is met, it signals a breadth thrust regime that indicates healthy market leadership conditions. This regime lasts for a year and increases the likelihood of upward movement in the stock market.
I will closely monitor whether Bulls can maintain this recent leadership and achieve positive follow-through in the coming days. While Bulls still have challenges to overcome, this is a solid start for them to regain control of the multi-year bull market.
Will we see this breadth thrust regime trigger tomorrow?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
ICYMI: JC did a livestream yesterday afternoon with Retail Expert Jeff Macke. They talked about the approach to investing in retail companies and highlighted a few of their favorites.
If you find my content valuable, I would greatly appreciate it if you could share it with your friends, family, and colleagues. Your help in spreading the word is invaluable in supporting our work. Thank you to all of you who share!
