No breadth thrust for NYSE stocks

NYSE stocks had an opportunity to trigger a bullish breadth thrust, but the Zweig Breadth Thrust indicator fell short of the required 61.5 level as of Friday’s (12/5) close, failing to confirm the signal (Chart 1).

Chart 1: NYSE Comp (top) and Breadth Thrust Indicator for NYSE stocks (bottom)

The NYSE Composite is confined to a broadening trading range since early October. As the index continues to navigate these choppy tactical waters, the volume advance-decline line for NYSE stocks pushed to new highs in late November and early December. This is a potential leading indicator for new highs for the NYSE Composite (Chart 2).

Chart 2: NYSE Comp (top) and NYSE stocks volume advance-decline line (bottom)

The missing ingredient is a breakout above a 3-month downtrend line on the NYSE stocks advance-decline line. In our view, a breakout above this downtrend resistance is needed to suggest that the NYSE Composite can break out to the upside from its October into December consolidation pattern. Until then, holding the 40-day moving averages for the NYSE (21,524) and the stocks advance-decline line (67,102) is important for maintaining a constructive near-term setup (Chart 3).

Chart 3: NYSE Comp (top) and NYSE stocks advance-decline line (bottom)