Not sure what the A/D ratio was yesterday but doesn’t matter to me as one day doesn’t make a trend. However, what does make a trend is/are consistent technical developments that occur over weeks or months, such as the stark divergence & under-performance of one of my favorite breadth indicators, the $NAAD (Nasdaq Advancing vs. Declining issues) so far in 2023. Chart below although I didn’t update the percentage measurement of the drop off that Nov ’21 highs yet nor the drop (so far) following the divergent from the entire 1st half of 2023 & subsquent under-performance of the $NAAD vs. the Nasdaq Composite.

Also, note that the divergence & under-performance is even worse between the $NAAD & $NDX but I only had this chart with the $COMPQ marked up & need to annotate one with $NAAD vs. $NDX.

There were 2 Zweig breadth thrusts this year ….There was also one in March

Randy
what is the advance vs decline ratio today ? I think it was 11:1 and if so is not this a huge reversal

With the market so overbought and -ve divergences, this is not the time to take new positions.. it is prudent to wait for a pull back and then decide..

I’m not arguing Randy’s thesis but we can’t argue with price action. I mean this in a respectful way but from SPY/QQQ perspective, perhaps, it’s helpful for subs to reevaluate the market. I’ll admit shorting this market has been very painful.

Should we get a marginal new high in the broad market soon, it would still reek of the very narrow leadership & lifting from mainly the Mag 7 that has marked nearly all of 2023 so far.

There are 11 sectors in the S&P 500 with tech, by far, the largest at around a 25% weighting (and the only one currently threatening new highs). The bottom 3 or 4 don’t move the needle due to their very low weightings & the 2nd, 3rd, 4th & 5th largest sectors, in that order (with percent below their previous ATHs) are:

XLV (healthcare) -11%
XLF (financials) -20%
XLY (consumer discretionary) – 28%
XLI (industrials) -6%
XLC (communications) -23%

Certainly possible to see new highs and if so, then the play might be to overweight the sectors above relative to tech as we would most likely see institutional rotation out of tech & into those lagging sectors if we are in a bull market that is headed to new highs & well beyond over the next year+.

Keep in mind that if we are in a new bull market with much higher highs yet to come (and not the tail-end of a bear market rally), the bottom was over a year ago (10/12/22) although I don’t know if the market had a Breadth thrust back then although it (most notably SPY) most certainly had some big fat bullish engulfing candles that I’ve pointed out before. SPY also put in a fat bearish engulfing candle at the 7/27/23 high which, at least as of now, still marks that major top.

Time will tell so if you feel strong on today’s signal, you can also go long here with a tight stop below today’s or yesterday’s lows & let it ride.

I seriously think we are in a new Bull Market from today!!!

Today marks the 15th BREADTH THRUST since 1945! It’s not a guarantee that the Bear case is closed but then again, does a sunrise indicate that night is closed. Time to join the Bulls on the Right Side of the Fence!

I think CNBC just had a headline reporting the largest S&P 500 short fund announced it’s closing! Yikes!