Category Archives: Breadth

Downside Pressure Nears Decade High

Posted on by
1

One of the indicators we track is Down Pressure.  It’s currently flirting with its most extreme levels of the past decade.

The indicator looks at the component stocks of the S&P 500 and computes how many points gained/lost were lost, and also how much of the volume flowing into up/down issues went into down issues.

Over the past 10 days, the average of those two figures is 73%, meaning about 73% of the points gained or lost in the component stocks were lost, and about 73% of the volume flowed into issues down on the day.

There have been four other days that match or exceed this reading – 7/22/02, 10/9/08, 7/2/10 and 8/4/11.  They were each within days of vicious market bounces.

Lopsided S&P 500 Breadth

Posted on by
1

On Monday for subscribers, we took a look at what’s happened in the past when almost every stock in the S&P 500 closed higher than its close the previous day.

At the time, 498 of the 500 components were positive, but by the close it had dipped to 492.  That still ranks as one of the all-time best days since 1997.

Today, we’re once again seeing almost every stock in the S&P 500 up on the day.  Below is the table we shared earlier in the week regarding these extremely lopsided breadth days.

Every one of the days occurred in the past five years.  Many times over the past several years, we’ve discussed the increased volatility in daily breadth data, likely due to high-frequency trading, the proliferation of ETFs and decimalization among other factors.

So extreme breadth readings today occur much more often and likely mean less than they did even 5 years ago.  Still, they are a notable phenomenon and we continue to find some value in them.