Entering today, 49.6% of stocks in the S&P 500 were above their 50-day moving averages. Below is a chart highlighting this breadth reading over the last year. As you can see, this indicator has put in a series of lower highs as the year has progressed, which indicates that a smaller and smaller number of stocks are participating in each rally.
Even though breadth has been weakening throughout the year, it hasn’t gotten outright negative. In fact, 40% or more of stocks in the index have closed above their 50-day moving averages for 208 consecutive trading days. That’s a remarkable streak. As you can see below, the last time we had a streak this long was back in the early 1990s. The longest streak since 1990 is 217 trading days, so we’ll have a new record if the current streak goes on for a couple more weeks.
From a sector perspective, Utilities has the strongest breadth at the moment with 92.9% of stocks above their 50-DMAs. Technology and Health Care rank 2nd and 3rd.
At the bottom of the list is Financials with just 15.2% of stocks above their 50-DMAs. A week ago it was the Energy sector that was struggling, but now it’s the Financials that have begun to break down.
Below is a look at weakening breadth for the S&P 500 Financial sector:
