The major indexes are still holding their longer-term uptrends, but short-term momentum keeps fading, especially in QQQ. Breadth stayed defensive: decliners outpaced advancers and downside “-4% day” pressure remained elevated. Small caps are relatively resilient on the weekly chart, yet the internal tape suggests this is still a market that needs leadership to reassert itself.
Index overview (SPY, QQQ, IWM)
Short Term (Daily)
Long Term (Weekly)
SPY
Daily: A modest pullback, but notable because price closed back below both EMA9/EMA21, signaling short-term momentum has cooled. The tape looks more like a “digest at highs” than a breakdown, yet it’s no longer the clean, persistent trend mode from earlier in the advance.
Weekly: Still structurally strong and near the upper area of its range. The 30-week trend remains positive, implying the bigger picture is intact, but near-term follow-through is lacking.
Takeaway: SPY is not flashing major damage, but it’s no longer being helped by short-term trend support, breadth will need to stabilize to avoid a deeper pullback.
QQQ
Daily: The weakest of the three. Wednesday’s drop pushed QQQ decisively below EMA9 and EMA21, and it finished near the lower part of the recent range. This is a clear “risk-off” message in growth/tech leadership.
Weekly: Despite the sharp weekly decline, QQQ is still above the 30-week trend line, so the long-term uptrend hasn’t flipped. However, momentum is clearly rolling over from an extended zone.
Takeaway: QQQ is currently the key risk barometer. If it can’t reclaim the short-term averages soon, breadth will likely stay heavy.
IWM
Daily: Pulled back and also slipped under EMA9/EMA21, but the decline looks more controlled than QQQ.
Weekly: Relative strength remains evident: IWM held up better (even slightly positive on the week in the snapshot), and the 30-week trend is still positive.
Takeaway: Small caps are not confirming the degree of weakness seen in QQQ. That’s a constructive divergence, but it needs follow-through.
Market breadth (10-day view)
Day-to-day breadth stays defensive
- Advancing vs. declining issues: 45% advancers vs. 52.1% decliners, still tilted negative.
- Big-move days: Adv +4%: 4.2% vs Decl -4%: 8.6%.
That imbalance is important: the market isn’t just seeing “more decliners,” it’s seeing more outsized downside moves, a classic sign that risk appetite is cooling.
Compared with Tuesday: The headline participation weakened slightly (advancers fell from 47.8% to 45%), while the downside pressure stayed elevated (decliners -4% rose from 8.2% to 8.6%). In other words: the rebound didn’t show up, and sellers stayed active.
Trend participation: short-term soft, medium-term still OK
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Above SMA(20): 46.1% → less than half the market is above the short-term trend.
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Above SMA(50): 56.1% and SMA(100): 54.2% → still more supportive.
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Above SMA(200): 58.9% → long-term participation remains healthy.
Interpretation: This looks like a short-term pullback inside a broader uptrend. The risk is that if weakness persists, the SMA(50)/SMA(100) figures will start to roll over next.
New highs vs new lows: still constructive, but watch closely
- New Highs (NH): 10.5% vs New Lows (NL): 4.1%.
That’s still a positive spread, and it improved a bit from Tuesday (NH up, NL down).
Interpretation: Leadership hasn’t vanished but the day/weekly breadth says participation is thinning. This is often what you see during rotation and digestion, but it can also be an early warning if the NH line starts to contract sharply.
Momentum/pressure measures confirm the “lean defensive” tone
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Pocket Pivots: 38% (up from 35% Tuesday), a small improvement, but not enough to offset the broader day/weekly weakness.
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Weekly breadth: 40.8% adv vs 58% decl - still clearly negative, though slightly less extreme than Tuesday’s 37.6% / 61.4%.
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Monthly breadth: 53.4% adv vs 45.9% decl - still positive on the month, but less strong than Tuesday (adv month dropped from 58.4% to 53.4%).
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3-month breadth: 59.5% adv vs 39.5% decl — the intermediate backdrop remains constructive.
Interpretation: The market is sending a consistent message:
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Short-term: caution (day + week are risk-off)
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Intermediate: still supportive (3-month remains solid)
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Tactical read: leadership (QQQ) needs to stabilize for breadth to rebound meaningfully.
Breadth trend rating (1–7)
Rating: 3 — Neutral, negative bias
The longer-term trend measures are still fine (SMA200+ near 59%, 3-month advancers strong), but the day/weekly tape remains defensive, and all three index ETFs are below their short-term EMAs on the daily chart, especially QQQ. This is not “broad breakdown,” but it is “momentum fading and downside expanding.”
What to watch next
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QQQ reclaiming EMA9/EMA21 would be the cleanest sign that leadership is returning.
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Breadth-wise: look for Adv Day back > 50% and Decl -4% falling back below Adv +4% (or at least compressing).
If SMA(20)+ stays stuck below 50% while weekly decliners remain dominant, the odds rise that the pullback broadens beyond just growth/tech.
Kristoff
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