📈 Watch This Signal

This will be telling for the week ahead.

Market Breadth

I wanted to revisit market breadth going into the new week. This was something I touched on in a post last week and I shared some signs that pointed to breadth decreasing.

Let’s take an updated look at where we’re at.

Stocks Above 200 SMA

The first sign we will look at is the percent of stocks above their 200 day moving average.

You can see that we’re at 73%. This is an encouraging sign. It tells us that the market as a whole is rallying, and not just a select few stocks.

We also had a small dip but didn’t really break down which bodes well.

Nasdaq / SPY

The chart below shows the performance of the Nasdaq relative to the S&P 500.

We can see that the Nasdaq is beginning to outperform again, which is exactly what we’re looking for. In a strong market you will always see the Nasdaq leading the SPY.

I commented last week that there may be some concern if we continued to see SPY outperform QQQ, but it looks like it has resolved itself which is great news.

For a better look at market internals and the strength of the market, watch the clip below: