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Breadth Getting Stronger

Market breadth continues to strengthen.  As shown below, 69% of the stocks in the S&P 500 are currently above their 50-day moving averages.  This paints a much better picture than the chart of the index itself.  While the S&P 500 is just a bit above its 50-day at the moment, a majority of stocks are well above their 50-days.  The discrepency is due to Apple (AAPL).  As the biggest stock in the S&P 500 by a wide margin, its negative action over the last few weeks has held the cap-weighted index back.

Below we highlight the percentage of stocks above their 50-days by sector.  The Technology sector, of which Apple is a member, is by far the biggest standout.  At the moment, a whopping 84% of the stocks that make up the S&P 500 Tech sector are above their 50-days.  Historically, when 84% of S&P 500 Tech sector stocks are above their 50-days, the sector itself is on average 4.5% above its 50-day.  Right now, however, the sector is just 0.11% above its 50-day.  Here again, Apple is the reason for the big divergence.  While the Tech sector may look bad based on its chart pattern, the large majority of Tech stocks actually look pretty good.