S&P 500 and market breadth
The chart of the S&P 500 alongside the percentage of NYSE stocks trading above their 50-day Exponential Moving Average (EMA) provides a snapshot of market breadth —a measure of participation across individual stocks.
Currently, 65% of NYSE stocks are above their 50 EMA, a healthy sign indicating broad market participation in the upward trend.
Market breadth is an important indicator for understanding overall market momentum. The percentage above the 50 EMA highlights how many stocks are in a short-term bullish phase. When a large proportion of stocks exceed this threshold, it often suggests robust underlying strength in the market. Conversely, a decline below key levels may signal weakening participation and potential trend reversals.
At 65%, the breadth suggests the market is in a favorable position, yet it has not reached extreme levels that typically warn of overbought conditions or momentum exhaustion.
Historically, readings closer to 80% or higher often coincide with temporary peaks, as buying pressure becomes overstretched. This middle-ground level reflects sustained bullish momentum without the risks associated with euphoria.
Monitoring market breadth helps traders gauge whether the broader market supports price action in major indices like the S&P 500. A divergence, where the index rises but breadth declines, can be an early warning of weakening momentum. For now, the positive breadth supports the current rally, reinforcing confidence in the market’s short-term trend.
Author
Alex Spiroglou, CFTe, DipTA (ATAA)
Independent Analyst
Alex Spiroglou is a quasi-systematic, cross-asset proprietary futures trader. His involvement with capital markets began in 1998, having worked for various proprietary trading and investment management firms in the UK and Greece.
