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Market Breadth Report

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), IWM, QQQ, SPY

Positive week affected positively the long-term market Breadth. As of now, we have following numbers:

  • 39% of the S&P index listed 500 stocks are bullish - up by 8% from a week ago - Bearish Breadth;
  • 47% of the DJI index listed stocks are bullish - up by 7% from a week - Weak Bearish Breadth;
  • 45% of the NASDAQ 100 index listed stocks are bullish - up by 6% from a week - Weak Bearish Breadth;
  • 26% of the Russell 2000 index listed stocks are bullish - up by 3% from a week - Bearish Breadth;
  • 29% of the NYSE index listed stocks are bullish - up by 5% from a week - Bearish Breadth.source: https://www.marketvolume.com/advance_decline/market-breadth-trend.asp

Four positive weeks in a row pushed the market Breadth up closer to the bullish edge. The market indexes recovered greatly, yet, the overall long-term Breadth numbers remain bearish. Only on the DJI index (DIA), the long-term Breadth sentiment has been lifted up close to the neutral level. Something similar could be said about the Nasdaq 100 index (QQQ). On the other hand, the S&P 500 (SPY) Breadth remains bearish. The Breadth sentiment on the Russell 2000 (IWM) and NYSE is in the deep bearish zone as well (despite the strong recovery).

We may see that the investors are back, however, the investors are very cautious and very selective. They are coming back into the strongest high-tech companies which are mainly listed in the Nasdaq 100 and DJI indexes. There are not a lot of investors willing to buy higher risk Small Cap stocks listed in the Russell 2000 and NYSE Composite indexes.

From the prospective of the market Breadth data, current recovery is weak - it is not backed up by the majority stocks on the market. Majority (71%) of the NYSE stocks are bearish - trading closer to their 52-week lows. Therefore, we continue to hold to the bearish long-term market sentiment.

NYSE Breadth chart

On the shorter-term time-frames, we recorded following numbers by the end of this week:

  • 35% of the S&P 500 stocks are above their 200-day MA - up by 8% from a week ago - Bearish Breadth,
  • 32% of the S&P 500 stocks are above their 120-day MA - up by 12% from a week ago - Bearish Breadth,
  • 64% of the S&P 500 stocks are above their 50-day MA - up by 31% from a week ago - Bullish Breadth,
  • 24% of the S&P 500 stocks are above their 200-day MA - up by 2% from a week ago - Bearish Breadth,
  • 24% of the S&P 500 stocks are above their 120-day MA - up by 6% from a week ago - Bearish Breadth,
  • 57% of the S&P 500 stocks are above their 50-day MA - up by 18% from a week ago - Weak Bullish Breadth.

The same as on the long-term time-frame, we have recorded an increase in the number of the bullish stocks on all short-term time-frames, in both Small Cap (Russell 2000) and Large Cap (S&P 500) market sectors. Finally, we see the dominance of the bullish stocks when we look at the stocks traded above and below 50-day Moving Average.

The Breadth momentum remains strongly bullish and it favors the Bulls for the coming week. However, the market indexes came close to some previously set resistance levels. Also, the market remains highly volatile - it is normal to see 1.5% and stronger swings n the S&P 500 within a single trading session. The last two reversal down on 12/4/2019 and 11/8/2019 were triggered in 1-2 trading sessions. We have to bear in mind that we may have strong and sharp changes in a sentiment. The market is still weak and fragile. It is highly recommended to monitor market Breadth on the daily basis.

Russell 2000 Percent above 50-day MA Breadth chart

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.