Market Breadth

Market breadth looks under the hood of an index. A cap-weighted index like the S&P 500 can rise on the strength of just a handful of giant stocks while most components fall. Breadth indicators count the participants — how many stocks are advancing, hitting new highs, or trading above their moving averages — to tell you whether a move is broad or hollow.

Common breadth gauges:

• Advance-Decline line: a running total of advancing minus declining stocks. Rising with the index = healthy; diverging = warning.
• New highs vs. new lows: expanding new highs confirm strength; a surge in new lows warns of weakness.
• % above the 200-day: the share of stocks in long-term uptrends.

The key signal is divergence: when the index makes a new high but breadth does not, fewer and fewer names are doing the lifting — a sign of an aging, fragile advance.

Breadth is a reality check on the index. It helps distinguish a durable, broad-based advance from a fragile one held up by a handful of names — context no single stock chart can give you. It's a core part of reading the market's overall health before acting on any signal.

Entry Point Trading folds breadth and macro context into its daily read, so each call is framed against the health of the whole market — and graded in the open.