Global stock market breadth is improving

Global stocks slipped last week. In the US, the S&P 500 again failed to surmount its 200-day moving average. Nevertheless, there’s increased talk that overall market action is looking healthier.

“Buying thrusts are broad, persistent, and global,” says SentimenTrader’s Jason Goepfert. That’s echoed by All Star Charts’ Willie Delwiche, who notes 80 per cent of global markets are trading above their 200-day average – the highest number since mid-2021.

Even in the underperforming US, market breadth continues to improve. Rob Hanna of Quantifiable Edges notes three separate breadth signals with “impressive track records” recently triggered on the same day. Taken together, they indicate strong returns are very likely over the next year.

Bears might retort that the downtrend remains intact and that bulls shouldn’t get ahead of themselves, given the number of failed rallies over the past year. Still, says Hanna, “all the recent breadth certainly seems to be a positive”.