Market Breadth and Internals
Given that indexes such as the $SPX are dominated by companies like Apple (over 7% index weighting) it is important to look at other charts that reflect the underlying strength or weakness of all the holdings within a given index. Below are some examples.
NYSE Advance/Decline Line (AD Line) Link to heading
The NYSE Advance/Decline Line (AD Line) is a market breadth indicator which represents the difference between the number of advancing and declining stocks. It rises when advances exceed declines and falls when declines exceed advances. The AD Line should confirm an advance or a decline with similar movements. Divergences could signal potential trend reversal or trend continuation.
The chart linked below shows that, at the time of writing on January 15th, the SPX has rebounded to its 200-day MA yet remains below its December, 2022 high, whereas the NYSE Advance-Decline Line (ADL) has moved well above its December, 2022 high. This represents the first bullish divergence between the $SPX and the ADL in more than two years, suggesting the continuation of bullish trend for NYSE as well as the $SPX.
NYSE Advance-Decline Line - Bullish Divergence
Here is another view of the AD Line showing recent bearish divergences:
NYSE Advance-Decline Line - Bearish Divergence
NYSE Net New Highs minus Net New Lows Link to heading
Net New Highs minus Net New Lows is another chart that has been in use for many years to determine NYSE breadth:
NYSE Net New Highs minus Net New Lows
Nasdaq Breadth and Internals Charts Link to heading
Nasdaq New Highs minus New Lows
Nasdaq New 52 Week Highs minus New 52 Week Lows
S&P 500 Breadth and Internals Charts Link to heading
S&P 500 Percentage of Stocks above the 20 day Moving Average
S&P 500 New Highs Percentage minus New Lows Percentage