After Wednesday’s improvement, Thursday looked more like a pause than a reversal. SPY and QQQ slipped back below their short-term averages, while IWM held firm. Breadth cooled on the day, but participation remains solid on a multi-week and long-term basis.
Index overview (SPY, QQQ, IWM)
Short Term (Daily)
Long Term (Weekly)
SPY
SPY ended slightly lower and is still below both the EMA9 and EMA21 on the daily chart. That’s a typical “cooldown” signal after an extended push, and it keeps the short-term tone neutral rather than outright bullish. The bigger picture is still constructive: the prior uptrend structure remains intact, and the pullback so far looks contained within a higher-level consolidation rather than a breakdown.
Weekly view: the long-term Trend Indicator remains green, and price is still well above the 30-week EMA. So the weekly trend is still supportive, daily weakness currently reads as consolidation within an uptrend.
QQQ
QQQ also finished red and remains below EMA9 and EMA21 on the daily timeframe. Compared to SPY, QQQ still looks more “heavy” because it has been oscillating underneath those short-term averages for longer. The current action is best described as range behavior: rebounds are happening, but they’re not yet strong enough to reclaim the short-term trend filters decisively.
Weekly view: the Trend Indicator is still green, but QQQ is stalling close to an overhead resistance band. That combination often leads to choppy rotation rather than a clean directional move.
IWM
IWM managed a green close and, importantly, is back above EMA9 and EMA21 on the daily chart. That’s a subtle but meaningful difference versus SPY/QQQ today: small caps absorbed the “pause day” better, suggesting rotation instead of broad-based selling.
Weekly view: the long-term Trend Indicator remains green, and price is holding well above the 30-week EMA. IWM is pressing into a resistance area, but it’s doing so from a position of strength.
Market breadth (10-day view)
1) Daily breadth cooled after Wednesday’s uptick
- Advancing stocks (Day): 46.5% vs Declining: 49.7%
That’s a clear shift from yesterday’s stronger skew (Feb 18 had 59.7% advancers). In other words: Thursday was a “give-back / pause” day in the internals.
Notably, extreme moves were fairly balanced:
- Advancing >4%: 4.1% vs Declining >4%: 2.1%
So while more stocks fell than rose, the downside didn’t broaden into heavy damage.
2) Participation remains healthy beneath the surface
The “stocks above moving averages” cluster stayed stubbornly strong:
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Above SMA(20): 54.5%
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Above SMA(50): 60.0%
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Above SMA(100): 59.4%
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Above SMA(200): 60.0%
This is the key contrast with the daily adv/dec softness: short-term momentum paused, but the market’s structural participation is still fine. That supports the idea that we’re dealing with consolidation rather than a trend break.
3) New highs cooled, but new lows remain contained
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New Highs: 3.1% (down from 4.5% yesterday)
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New Lows: 1.5% (still low)
So the market is producing fewer fresh breakouts right now, but it’s not expanding breakdown pressure either.
4) Weekly breadth still lags the longer-term picture
- Advancing (Week): 44.1% vs Declining (Week): 54.7%
That lines up with what the index charts show: a short-term “repair phase” where rallies occur, but follow-through remains inconsistent.
Meanwhile, the longer windows still look constructive:
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Advancing (Month): 53.4% vs Declining (Month): 46.0%
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Advancing (3 Months): 68.3% vs Declining (3 Months): 30.9%
This is exactly the mix that produces choppy tape: good longer-term participation, but near-term hesitations and rotations.
Bottom Line
5 — Neutral Positive Bias
Thursday confirms the message from Wednesday: breadth is improving, but not in a straight line. Large caps paused and stayed below their short-term EMAs, while small caps held up better. The daily adv/dec line cooled, yet the percentage of stocks above key moving averages remains solid and new lows are still contained.
Practical takeaway: treat this environment as neutral with a positive bias, trend structure is intact, but short-term follow-through remains selective and rotation-driven.
Kristoff - ChartMill
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