Market breadth – Some Worry Now:

Just the repeat once again on market breadth “The Advance / Decline Line (AD line) is one of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.”

The last time we looked – back in August 18 the S&P500 was at all time highs and the NYSE A/D was still not confirming the recent advance - a sign of thinning leadership. Now the breadth problem is acute as displayed in our latest NYSE A/D line chart. Now we see both the S&P500 and the lower A/D Line failing to break above their respective July 2014 highs – so now we need the A/D line to hold at the early August lows to complete a shallow A-B-C type correction