Market Monitor Trends and Breadth August 5 BMO - Broad-Based Bounce: Market Breadth Turns Sharply Positive to Start August

(All data & visualisations by ChartMill.com)

Daily Market Trend Analysis – August 4, 2025 (After Market Close)

Strong recovery and gap closing for the main index-ETF's

Short Term Trend

SPY (S&P 500 ETF)

• Short-Term Trend: Neutral (no change)
• Next Support at $620 - $600
• Next Resistance at $640
• Volume: At Average (50)
• Pattern: Up Day - Gap Closing

QQQ (Nasdaq-100 ETF)

• Short-Term Trend: Bullish (from Neutral)
• Next Support at $550 - $540
• Next Resistance at $575
• Volume: At Average (50)
• Pattern: Up Day - Gap Closing

IWM (Russell 2000 ETF)

• Short-Term Trend: Neutral (no change)
• Next Support at $220 - $215
• Next Resistance at $226
• Volume: At Average (50)
• Pattern: Up Day - Gap Closing

Long Term Trend

SPY (S&P 500 ETF)

• Long-Term Trend: Positive (no change)

QQQ (Nasdaq-100 ETF)

• Long-Term Trend: Positive (no change)

IWM (Russell 2000 ETF)

• Long-Term Trend: Positive (no change)

Daily Market Breadth Analysis – August 4, 2025 (After Market Close)

After a string of deteriorating breadth readings throughout the previous week, the session on Monday, August 4, 2025, delivered a sharp and broad-based rebound across nearly all metrics. The strength and participation were significantly better than what recent trends had suggested.

1. Strong Reversal in Daily Breadth Metrics

• Advancing issues surged to 80.4%, the highest single-day reading in this 10-day window, while decliners dropped to just 17.4%.

• More impressively, 5.6% of stocks were up more than 4%, a strong improvement over the meager ~2% range seen on most down days last week.

• Only 1.2% of stocks declined more than 4%, continuing a recent trend of relatively low extreme downside.

Compared to August 1, which saw just 25.9% advancing stocks and 2.3% up more than 4%, Monday’s session marks a clear reversal. The breadth rebound was even stronger than the brief recovery attempt on July 25 (56.6% advancers), and reminiscent of the strong July 23–24 bounce, albeit with slightly lower upside extremes.

2. Improvement in Trend Participation

There was a notable uptick in the percentage of stocks above key moving averages:

• SMA(20): 42.2% → up from 28.3% on Aug 1

• SMA(50): 59.2% → up from 50.5%

• SMA(100): 66.1% → up from 62%

• SMA(200): 50.9% → up from 47.8%

This confirms short- and intermediate-term trend participation is improving again, recovering from last week's dip. It mirrors the pattern from July 22–24, where breadth strengthened rapidly over a few sessions, led by growth stocks, before stalling out.

3. New Highs vs New Lows (NH-NL)

• New Highs: 2.1%, up slightly from 1.0% on August 1.

• New Lows: 1.0%, continuing the downtrend.

While not explosive, this ratio shows a healthier backdrop. New Lows are back near their lowest levels since July 22.

4. Weekly and Monthly Metrics Shift

• Advancing Week (28.6%) and Declining Week (33.1%) still reflect earlier weakness, but with Monday’s strong start, this could change quickly over the coming days.

On a monthly basis, we now see a marginal edge for bulls:

• Adv Month: 51.1%

• Decl Month: 48.2%

This is a subtle but important inflection, as August 1 still showed a bearish bias (35.7% adv vs 63.8% decl for the month at that point).

5. 3-Month Outlook – Breadth Bottoming?

• 69.9% of stocks are up over the past 3 months, up from 66.4% on Aug 1.

• 15.6% are up more than 25%, slightly better than the 14.7% on Aug 1.

• Decliners over 3 months remain modest (29.5%), and only 4.9% of stocks are down more than 25%, confirming longer-term damage remains contained.

These metrics suggest the broader market remains in a largely constructive longer-term trend, and that last week’s selling may have been a healthy pullback, rather than the start of a deeper correction.

Conclusion: A Clear Breadth Rebound

The data from August 4 signals a broad and healthy bounce, with improvements in nearly every short- and intermediate-term metric. The market has shifted from a neutral-to-negative breadth backdrop to a clearly positive one, although confirmation over the next few sessions will be key.

This move comes amid a relatively quiet news cycle and may reflect buy-the-dip behavior following last week’s drawdown, combined with stabilizing economic expectations and anticipation of upcoming earnings reports from key tech and industrial names.

Unless Tuesday brings a sharp reversal, this could mark the start of a new short-term breadth uptrend.

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Kristoff - ChartMill

Next to read: Market Monitor News, August 5