US MARKET BREADTH. Where Next for Stocks in the US Stock Market – Bullish or Bearish?

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Quick Links

  • Timing the US Stock Market Using the Market Breadth Indicators – Introduction (0:00)
  • Major Market Indexes – S&P 500, Dow Jones Industrial Average, Nasdaq 100 & S&P 600 Small Caps (1:03)
  • US Treasuries & Commodities – 7-10 Year US Treasuries, Gold, Crude Oil & Copper (3:30)
  • NYSE Bullish Percent Index & Percentage of Stocks Above Their 200, 150 & 50 Day Moving Averages Charts (5:38)
  • Definitions of the Current Market Breadth Status (8:05)
  • NYSE Advance Decline Line Charts (8:39)
  • US New Highs - New Lows Charts & Momentum Index (10:20)
  • Cumulative Point & Figure Breakouts - Breakdowns (11:04)
  • Sector Breadth: Percentage of Stocks Above Their 150 Day Moving Average – Relative Strength Table (12:29)
  • Sector Breadth: Percentage of Stocks Above Their 150 Day Moving Average – Overview Diagram (13:23)

The major stock market indexes attempted to breakout to new highs again this week, but failed, and turned down to end the week near their lows. In contrast US treasuries made a Stage 2 continuation breakout to new highs, as did Gold on some reasonable volume, and the Gold miners. So I took a position in Gold in my pension account.

The NYSE Bullish Percent Index and Percentage of Stocks Above Their 200, 150 & 50 Day Moving Averages Charts continue to show divergences with the price action, with fewer stocks participating while the market makes new highs. This can often continue for a long while, but at some point with fewer and fewer stocks holding up the market, it will cause a problem.

The Advance Decline Line and New Highs, New Lows remain on bullish signal though, as does the Cumulative Point & Figure Breakouts minus Breakdowns chart.

So the current weight of evidence from the combined market breadth indicators signals a neutral + stance in my opinion. So a cautious strategy seems sensible currently, as the market is extended short term still, but that doesn't mean it can't still go higher again, as it's a bull market after all. But protect your account.

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A regular look beneath the surface of the US stock market, featuring the key market breadth indicator charts for timing trading stocks and the stock market indexes, such as the NYSE Bullish Percent Index, the Advance Decline Line, the New Highs - New Lows etc and some custom breadth indicators of my own in order to determine what the "Weight of Evidence" is suggesting in terms of the US stock market direction and how to allocate your money.

This is done using the market breadth indicators that were highlighted in Chapter 8 of Stan Weinstein's Secrets For Profiting in Bull and Bear Markets Book – which was called: Using the Best Long Term Indicators to Spot Bull and Bear Markets.