Still waiting for two breadth breakouts

Market breadth indicators have improved from late November into December with an expansion in new 52-week highs relative to new 52-week lows on both the S&P 500 and the broad-based NYSE Composite (Chart 1 and Chart 2), new highs for the S&P 500 and NYSE stocks volume advance-decline lines (Chart 3 and Chart 4), and a recent new high for the S&P 500 advance-decline line (Chart 5).

Chart 1: S&P 500 (top) and the spread between new 52-week highs and new 52-week lows (bottom)

Chart 2: NYSE Composite (top) and the spread between new 52-week highs and new 52-week lows (bottom)

Chart 3: S&P 500 (top) and the volume advance-decline line (bottom)

Chart 4: NYSE Composite (top) and the volume advance-decline line (bottom)

Chart 5: S&P 500 (top) and the advance-decline line (bottom)

We are looking for two more signals to confirm improving market breadth:

1. A breakout above 50-51.6% on the percent of S&P 500 stocks above their 100-day moving averages (Chart 6)

2. A push above the 3-month downtrend line for the NYSE stocks advance-decline line (Chart 7)

Chart 6: S&P 500 (top) and the percent of stocks above 100-day moving averages (bottom)

Chart 7: NYSE Composite (top) and the NYSE stocks advance-decline line (bottom)

Higher U.S. Treasury yields (see Monday's post on the 30-year Treasury yield) have capped tactical upside for the U.S. equity indices ahead of today's Federal Reserve's decision on interest rates. The FOMC (Federal Open Market Committee) is widely expected to cut rates 25 basis points for the third consecutive FOMC meeting, moving the Fed Fund rate to a 3.75%-3.50% range. However, all eyes will be on guidance for the future path of interest rates 2026.

The S&P 500 shows resistance at 6868 to the late October high at 6920. Nearby support comes in at 6770, but the more important price zone is from 6631 to 6521 (11/7 and 11/21 lows), with the rising 100-day moving average near 6609 reinforcing this support zone (Chart 8). Holding above or near support would favor a bullish consolidation pattern and future higher highs. If market breadth can remain firm, it would support the bullish case for U.S. equities with SPX 7000+ possible into yearend / early 2026. This aligns with positive seasonality scenarios highlighted in recent reports and in the Straight from the Chart blog.

Chart 8: S&P 500: Daily chart