Below is a look at the percentage of stocks in the S&P 500 trading above their 50-day moving averages by day over the last year. At the moment, 62% of companies in the index are above their 50-days. This is a relatively weak reading given that the index is right at all-time highs, but it’s not surprising given the failure of the index to experience a meaningful breakout higher this year.
Below is a look at our 50-DMA breadth reading compared to the price action of the S&P 500 since the bull market began in 2009. As you can see, throughout this bull, we’ve seen breadth readings all the way above 90% and all the way down to 0%. Recently, though, we’ve seen a tightening of the hi/lo range in breadth, which speaks to the sideways, low-vol market we’ve seen in 2015. The good thing is that at 62%, breadth is not at overbought levels that would suggest a pullback from all-time highs is imminent. Bulls would argue that current breadth levels suggest huge upside room to run if we do see the market make another leg higher in the near term. Bears, however, would argue that declining breadth levels in recent months suggests a market where less and less stocks are participating on the upside.