SPX: Market has a bad brea(d)th

Alex Spiroglou, CFTe, DipTA (ATAA)Independent Analyst

TOP PANEL: SPX & Volatility Stops

BOTTOM PANEL: % of SPX stocks > 20 MA , NYSE A/D line

Section 1: The market has bad brea(d)th

When it comes to the market’s foundation, things aren’t looking as strong as they seem.

The middle panel of the chart highlights the cumulative NYSE A/D line,

which tracks the net number of advancing vs. declining stocks on the NYSE.

Right now, it’s flashing a warning: despite the index hitting new highs,

the A/D line isn’t confirming this move (highlighted in red).

In the third panel, the percentage of SPX stocks trading above their 20-day EMA

(short term breadth) is also slightly concerning.

It recently hit overbought levels (>70) but is now declining,

another warning for the market’s strength.

Section 2: About the Indicators

NYSE A/D Line: This measures market breadth by comparing advancing stocks to declining stocks. A rising line confirms broad participation, while a divergence signals fewer stocks driving the rally.
% of SPX Stocks > 20 EMA: This indicator shows the percentage of SPX stocks trading above their 20-day exponential moving average. Readings above 70% suggest overbought conditions, while a decline signals weakening momentum.

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.

More from Alex Spiroglou, CFTe, DipTA (ATAA)

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold retests $4,300; USD losses momentum

Gold picks up fresh upside traction and challenges the key $4,300 mark per troy ounce on Monday. The yellow metal, however, remain on the back foot on the back of marked gains in the US Dollar and rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP recover ahead of US Senate vote on CLARITY Act

Bitcoin edges higher, trading near $77,884 as of Monday, in tandem with broader gains across the cryptocurrency market. Ethereum and Ripple follow Bitcoin’s neutral-to-bullish trajectory, holding key support levels at $2,521 and $1.38, respectively.

Will the Fed deliver the hawkishness markets are pricing in?

Fed hike bets increase after PPI and CPI reports. Updated dot plot to be crucial for the dollar’s reaction. Warsh’s independence faces test amid Trump’s pressure for lower rates. For the Dollar to extend gains, Fed needs to satisfy current hawkish bets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.