After a 5% rally over the last few days, breadth levels have picked up nicely for the S&P 500, but there are still less than 50% of stocks in the index trading above their 50-day moving averages. Below is a chart of this reading over the last year. You can see a clear downtrend line in place from the highs reached in Q4 ’14. When the S&P last hit an all-time high back in May, breadth was extremely weak. If the reading continues to move higher in the near term, though, the downtrend will be broken.
Below is a look at breadth readings for the ten S&P 500 sectors. As shown, Health Care now looks like Energy looked a couple of months ago. While all of the other sectors have readings between 30% and 75%, Health Care has just 5.7% of its stocks above their 50-days. Energy, on the other hand, has the third best reading at the moment at 62.5%.
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