However, market breadth is increasingly suggesting internal market weakness. I view this deterioration in market breadth as a warning, rather than a signal.
Below is a chart of the S&P 500 Index in the top pane, and the MACD in the lower pane. Here are my takeaways: The number of stocks within the index above their 200-day and 50-day moving averages has declined since April; however, the index has continued to advance. This is a negative divergence that indicates a deterioration in market breadth.
BPI is an indicator based on the number of stocks on Point & Figure Buy Signals within an index. BPI helps you understand the internal health of an index by looking at the number of components that are on a bullish or bearish track.
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