{"id":76412,"date":"2023-10-24T21:02:53","date_gmt":"2023-10-25T01:02:53","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/breadth-bombs-seeking-alpha\/"},"modified":"2023-10-24T21:02:59","modified_gmt":"2023-10-25T01:02:59","slug":"breadth-bombs-seeking-alpha","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=76412","title":{"rendered":"Breadth Bombs | Seeking Alpha"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<p>A frequent point of discussion this year has been breadth, or more specifically, the massive impact of mega caps on the market-cap-weighted S&amp;P 500&#8217;s year-to-date performance (something we discussed in yesterday&#8217;s update of our Sector Weightings report).<\/p>\n<p class=\"paywall-full-content invisible\">We often use the 10-day advance-decline (A\/D) line to measure how breadth is evolving in the near term; highlighting these readings for the S&amp;P 500 and its eleven sectors daily in the Sector Snapshot.<\/p>\n<p class=\"paywall-full-content invisible\">This indicator essentially shows the average net percentage of daily advancers versus decliners in an index over a two-week period.<\/p>\n<p class=\"paywall-full-content invisible\">In the chart below, we show the S&amp;P 500&#8217;s 10-day A\/D line (expressed as standard deviations to clarify overbought\/oversold levels) over the past year. The past week has seen a monumental shift in breadth.<\/p>\n<p class=\"paywall-full-content invisible\">Just one week ago, the 10-day A\/D line was deeply overbought sitting 1.72<span class=\"paywall-full-content no-summary-bullets invisible\"> standard deviations above the historical average, but as of yesterday&#8217;s close, it has fallen all the way into oversold territory; a 2.9 standard deviation drop in only four days.<\/span><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/10\/saupload_102423-AD.png\" alt=\"S&amp;P 500's 10-day A\/D line\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption><\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Looking back to the start of our data in 1990, that is one of the largest four-day declines on record. In fact, the last time the line fell by such a degree or more was in September 2022 when there was a record decline.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/10\/saupload_102423-AD-1.png\" alt=\"S&amp;P 500's 10-day A\/D line\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption><\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">While two-standard deviation declines have been uncommon, even fewer have resulted in the 10-day A\/D line going from overbought to oversold.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">In the table below, we highlight those nine prior instances that have occurred with at least 3 months having passed since the last occurrence.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The current period holds one of the higher starting readings in the 10-day A\/D line. In fact, only November 2011 saw a higher reading.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">As for S&amp;P 500 performance going forward, returns have generally been mixed. One week after big &#8216;breadth bombs,&#8217; the index has actually risen better than three-quarters of the time, however, one month out has averaged a decline with positive returns less than half the time.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Three months out to one year on have all averaged positive returns, but those are all weaker than the norm.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/10\/saupload_102423-AD-2c.png\" alt=\"S&amp;P 500's 10-day A\/D line\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption><\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><em>Original Post<\/em><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>Editor&#8217;s Note:<\/strong> The summary bullets for this article were chosen by Seeking Alpha editors.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4643115-breadth-bombs?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A frequent point of discussion this year has been breadth, or more specifically, the massive impact of mega caps on the market-cap-weighted S&amp;P 500&#8217;s year-to-date performance (something we discussed in yesterday&#8217;s update of our Sector Weightings report). We often use the 10-day advance-decline (A\/D) line to measure how breadth is evolving in the near term; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35392,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-76412","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Breadth Bombs | Seeking Alpha | iFintechWorld<\/title>\n<meta name=\"description\" content=\"A frequent point of discussion this year has been breadth, or more specifically, the massive impact of mega caps on the market-cap-weighted S&amp;P 500&#039;s\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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