By Kristoff De Turck - reviewed by Aldwin Keppens
Last update: May 22, 2025
(All data & visualisations by ChartMill.com)
All three major ETFs QQQ, SPY, and IWM) show short-term weakness. On the daily charts, each ETF pulled back from key supply levels with elevated volume, confirming the breadth deterioration seen earlier.
On the weekly charts, the uptrend is intact, but this week’s rejection at resistance (especially in IWM) suggests potential stalling momentum. The broader market remains vulnerable if follow-through selling continues and key support zones are tested.
On May 21, 2025, only 12.4% of stocks advanced, while a stark 86.4% declined, one of the weakest breadth days in the period. This contrasts sharply with May 12, where 75.4% of stocks advanced and only 23.2% declined, a broad-based up day.
Gradual Erosion in Participation
From May 12 through May 20, there was a steady decline in advancing issues and a rise in decliners, indicating narrowing participation in rallies.
Breadth deteriorated ahead of the major drop on May 21, signaling weakening market internals before the breakdown.
Stocks Above Key Moving Averages
Stocks above the SMA(20) peaked at 78.6% on May 12 but dropped to 59% by May 21.
A similar decline is seen in the SMA(50)+ (from 71% to 62%) and SMA(100)+ (51.4% to 42.5%).
The SMA(200)+ measure - a long-term health indicator - remains below 43% throughout, suggesting the broader market is still not fully healthy even prior to May 21.
New Highs vs New Lows
New Highs remained modest (~3–4%) throughout the period, peaking slightly before May 21.
New Lows, while low until May 20, spiked to 1.8% on May 21 — a warning sign of internal damage beneath the surface.
Advancers vs Decliners:
The drastic inversion on May 21 (majority of stocks declining) visually underscores the breadth collapse.
Stocks Above Moving Averages:
A steady downtrend from short- to long-term averages shows internal weakness building.
New Highs vs New Lows:
The spread between NH and NL narrowed, with lows increasing — a classic sign of a deteriorating market.
The broad-based selling on May 21 wasn't a surprise, it was preceded by several days of narrowing breadth. Participation is thinning, and without a reversal in moving average support or a broad uptick in advancers, market risk remains elevated.
Traders and investors should be cautious of rallies that lack broad participation and consider risk management or defensive positioning.
218.01
+2.22 (+1.03%)
546.99
-4.65 (-0.84%)
617.65
-0.2 (-0.03%)
Find more stocks in the Stock Screener
Breadth Check: Market Still Holding Up — But the Momentum Is Looking a Bit Tired
Market Breadth Holds Strong as Quarter Ends With Momentum
Stocks Hold the Line, but Under the Surface? Mixed Signals Persist
Market Breadth Roars Back: Bulls Reclaim Control, But Will They Hold the Line?
Breadth Falters Again as Bulls Lose Steam After One-Day Comeback
Breadth Bounces Back: The Rally Finds Broader Legs
Market breadth bounces back, more stocks trading above key averages as bullish momentum builds after last week's chop.
Market internals weaken ahead of U.S. strike on Iran; advance-decline ratios and breadth metrics flash growing risk aversion.
Steady But Fragile: Breadth Signals a Market in Flux
The Market Breathes Out Again – But It’s a Nervous Exhale
Friday’s breadth collapse raised some eyebrows, but Monday erased a lot of that doubt.
Sharp Reversal as Breadth Collapses