Charts Showing U.S. Stock Market Breadth Improvement

Bespoke: S&P 500’s August Rebound Backed by Strong Breadth Across Multiple Measures

More U.S. stocks are joining the recent stock market rally, as the S&P 500 continues to build on its August rebound, according to Bespoke Investment Group.

“Since the sharp drop that led to the August 5 low, a key feature of the stock market recovery has been the strength of its underlying breadth,” said Bespoke in a note on Tuesday.

The wealth-management and research firm highlighted that whether you look at the number of stocks hitting 52-week highs, the percentage trading above their 50-day moving averages, or the net count of rising stocks, there have been notable improvements.

The S&P 500’s 10-day advance/decline line remained above 1,000 for the seventh consecutive day on Tuesday, the longest stretch since October 2020 and “one of just 22 such streaks since 1990,” Bespoke noted.

“Historically, after a seven-day streak with the 10-day A/D line above 1,000, forward returns have been consistently positive, especially when these streaks occur at least a year apart,” Bespoke added.

The S&P 500 gained 0.2% on Tuesday, closing at 5,625.80, just 0.7% below its July 16 record close. The index is up 1.9% in August and has gained 17.9% year-to-date.

On Monday, the S&P 500’s 10-day advance/decline line reached 1,733, its highest since late October 2022, which marked the start of the bull stock market, according to Bespoke.

U.S. stocks broadly rose on Tuesday, with the tech-heavy Nasdaq Composite up 0.2% and the Dow Jones Industrial Average inching up 0.1% to hit a new all-time high.