Why Breadth Breaks Before The Index Does
Hey Trader, The S&P 500 broke out today. I want you to ignore it. Because there is something far more important that tells you the strength of the market. You see, the index is one number. It hides what’s happening underneath it, and you pay for that blind spot when the leaders finally quit. Right now, twenty stocks are carrying this market. The other 480 are garbage that nobody even tracks. In fact, half the S&P 500 index sits in bear market territory! Let me give you an example. Merck printed a 52-week high this morning. J&J sat right on an all-time high. McDonald’s printed a multi-decade low on the same tape. Nothing is wrong with the company. I have watched that setup resolve once before. That time, we corrected from 6,800 down to 5,400. And while I love the advance-decline line, it only gives you a snapshot of things.