Breadth So Bad, That It’s Good

This washed-out indicator just gave a buy signal... [Jeff Clark's Market Minute]( Andrew’s Note: Before we get to Clint Brewer’s essay, I want to remind you of Jeff Clark’s big event tonight at 8 p.m. ET. A historic reset is about to hit the markets, and Jeff is urging everyone to move their money into a [rare vehicle]( by May 1. The last time we saw a sell-off of this magnitude, readers had the chance to double their money 14 different times. Now, you have the chance to buy into this unconventional vehicle at a historically low price to potentially double, triple, or even quadruple your money. For more details and a free recommendation from Jeff, [click here]( to join him tonight. --------------------------------------------------------------- Breadth So Bad, That It’s Good By Clint Brewer, analyst, Market Minute The stock market has caught investors by surprise… Despite facing the worst bank crisis since the 2008 financial sector meltdown, we saw solid gains for the first quarter. The Nasdaq Composite even managed to jump 17% – its best three-month stretch since 2020. However, this action in the market is concerning… Because the number of stocks driving the Nasdaq and S&P 500 gains has dwindled. And that’s leading to plenty of calls that this rally is in jeopardy. Let me give you an example... The 19 largest technology stocks added $2 trillion to their market cap in the first quarter. But meanwhile, over 80% of all listed stocks were trading below their 50-day moving average (MA) near the end of the first quarter. While popular indexes were painting a rosy picture, many stocks were stuck in downtrends. Participation in the stock market’s underlying trend is referred to as breadth. And if there’s one defining feature of 2023, it’s that breadth has been terrible so far. But before you rush for the exits, you should consider that when breadth is so bad – it can be good. Recommended Link [Stocks are for suckers – try this instead]( [image]( This has nothing to do with dividends, day trading... taking out a loan… or anything like that. What you need is about 3 seconds to execute this simple financial maneuver… And you could be generating $230… $630… even $1,420 or more… In the next hour. [Click here to learn how!]( -- How to Use Breadth There are different ways to use stock market breadth to help you determine a potential change in the stock market’s direction. One common method is to use participation to assess the strength of the stock market’s underlying trend. When fewer stocks are participating, that means the underlying trend is crumbling. You can also use breadth to monitor extremely oversold conditions… a sign of selling pressure that indicates a washed-out market. When the number of stocks in downtrends hits an extremely low level, that’s a good sign most investors are throwing in the towel – which could be your next buying opportunity. [Millionaire Trader Reveals: How to Make One “Backdoor” Currency Trade – Every Month – And Start Making All the Money You Need to Fund Your Retirement]( Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Breadth is Washed Out The McClellan Summation Index is a breadth metric that track signs of markets becoming overbought or oversold. This indicator is built by looking at a trailing difference of advancing versus declining stocks on the New York Stock Exchange. When it’s moving higher, that implies gaining stocks are outpacing falling ones and vice versa. And something interesting is happening with this gauge... Last week, under-the-hood selling in the market reached an extreme. You can see that in the chart below where readings of -500 and below mark oversold levels. [(Click here to expand image)]( Not only did the index touch that level, but it’s starting to improve and turn higher. I apply a 10-day MA (red line) to the index to generate buy and sell signals, and you can see a positive crossover recently occurred (green circle). [On March 29]( I showed you how fearful sentiment could support a rally in the stock market. Now, with breadth hitting bearish extremes, this rally could have more room to run. Best regards, Clint Brewer Analyst, Market Minute READER MAILBAG What are your predictions for the current market rally? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. IN CASE YOU MISSED IT… [Is There a Cash Disaster for Savers?]( Silicon Valley Bank was the second-largest bank collapse in history. Second only to Washington Mutual when it went under in 2008. Then Signature Bank of NY was taken over by regulators. Making it the second massive bank failure in 3 days. These events beg the question: Is your bank safe? [Is your money safe?]( With all that’s been going on, former Goldman Sachs executive Dr. Nomi Prins used to think a crash was inevitable. One that could wipe out the savings of investors, seniors and retirees. She still believes there is going to be an economic crisis. Just not the kind of crisis most people expect. [Read the full story here.]( P.S. We’re on the brink of the greatest transfer of wealth in American history. It’s a complete transformation of America using the financial system as a tool for change. [Find out more here.]( [image]( [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. 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