A Breadth of Fresh Air

A brief note on market breadth

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Breadth thrusts are NOT signs of exhaustion. They are evidence of new trends emerging.

When we get these monster bullish breadth thrusts, remember these are things we tend to see near the beginning of bull market cycles, not near the end of them.

To be clear, I believe a cluster of breadth thrusts is not a want but a need in order to signal that the next bull market has begun.

Guess what?!… we are getting that cluster!

I have been pretty obnoxious on X about the expansion in all breadth readings we currently see in the US.

Last week, we saw more than 55% of S&P 500 stocks trading at new 20-day highs. In my work, that is a key breadth thrust:

This reading actually moved even higher this week to 68%… thats a massive move!

We also saw more than 50% of S&P 500 stocks trading at new 63-day highs this week:

This is a longer-term thrust…

Will we see this move into 6-month highs? Most likely if the stock market continues to move higher and re-test all-time highs at an index level.

Here’s another breadth reading that is thrusting… Percentage of S&P 500 stocks overbought:

44% of stocks are overbought! This is the highest read in two decades. (My data only goes back two decades)

This is not a bearish signal…. it’s bullish!

Strength generates more strength…

Change my mind?

YOU CANT!

Based on the weight of the evidence and frequency of these massive breadth readings, I am definitely leaning towards this being the beginning of a new bull market.

I will continue to monitor breadth data as it comes in each day, and I’ll update you with a blog post if necessary.

For now, I think things are looking pretty good.

My question to you… What information did you get out of my charts?

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As always, stay safe and good luck out there…

Please reach out with any other questions…

GH

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