There’s no denying the strength the major averages have displayed off their April lows. The S&P 500 finished the week within a rounding error of the previous all-time high around 5250. What would it take for the SPX and NDX to power to new all-time highs in May? Today, we’ll break down three market breadth indicators that we are watching to confirm the likelihood of a further rise for the equity indexes. We’re also watching those same three charts for warning signs of a trend exhaustion! First, let’s measure how many stocks are above key moving averages. Percent of Stocks Above the 50- and 200-Day Moving Averages One of my favorite breadth indicators looks at how the members of a particular index are trading relative to their 50-day and 200-day moving averages. During an uptrend phase, a stock tends to be moving higher above two upward-sloping moving averages. By making this simple comparison across a…
