Connect with us

Hi, what are you looking for?

Stock

Breadth is Not Keeping Pace with the Bounce

The S&P 500 SPDR bounced the last three weeks, but we did not see an improvement in breadth. Weak breadth is also reflected in performance for mid-caps and small-caps, which are lagging. Even so, SPY and QQQ are in short-term uptrends and I am watching the tech sector for clues.

Breadth is Not Keeping Pace with the Bounce – Plus MDY, IWM and XLK

These charts were part of Tuesday morning’s Chart Trader report at TrendInvestorPro. The first chart shows the S&P 500 with the red vertical line marking August 18th. The index is up 2.8% since date. The first indicator window shows SPX %Above 200-day SMA moving sideways since this move (red shading). There was no improvement during the bounce. The second window shows SPX %Above 50-day SMA also moving sideways and remaining below 50%.

The next chart shows SPY, the S&P MidCap 400 SPDR (MDY) and the Russell 2000 ETF (IWM) since January 2023. SPY exceeded its February high and is currently around 7.5% above this high. MDY and IWM failed at the February high and are currently around 5% below this high. Small-caps and mid-caps are not the place to be.

Large-cap techs are the place to be. QQQ and XLK are leading the market and helping the large-cap weighted S&P 500 (SPY). The next chart shows XLK with a breakout in late August and short-term uptrend (blue dashed lines). At this point, traders must decide what it would take to prove this bullish stance wrong.

The dashed lines show a possible rising flag (bearish pattern). XLK is testing the flag line after a decline last week. There is also the big surge on August 29th (Marubozu candlestick). I am using the low of this candlestick to mark support at 169. A close below 169 would erase this big gain and clearly break flag support. Such a move would be bearish.

Check out the Chart Trader report at TrendInvestorPro for more details. Tuesday’s report updated levels for SPY and QQQ, highlighted TLT and covered yield spreads. We also provided some analysis and setups for ITB, SOXX, PPA and five stocks. Click here for immediate access.

Click here it learn about the TIP Indicator Edge Plugin for StockCharts ACP.

—————————————

You May Also Like

Latest News

President Biden is asking Congress to approve nearly $100 billion in emergency funding to aid recovery efforts for the recent deadly storms that ravaged...

Stock

One hallmark of secular bull markets is rotation. When leading stocks, sectors, and industry groups falter, there needs to be others that grab the...

Latest News

Activists on Saturday demanded that the state of California pay millions of dollars to each Black resident in reparations as a way to make...

Latest News

Vice President Kamala Harris spent a whopping $1.5 billion during her 15-week campaign that ended in defeat to President-elect Donald Trump, including burning through...



Disclaimer: Frequencytraders.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2024 Frequencytraders.com