Breadth Continues To Confirm New Price Lows

The first chart is the percentage of 52-week lows in the Russell 3000, which has expanded to three times what it was during the Q1 correction and has hit levels not seen since the Financial Crisis (which peaked at 28%).

Click on chart to enlarge view.

We're also seeing the same action in the number of Russell 3000 stocks with momentum in a bearish regime, which now sits at nearly 50%.

The lack of a meaningful divergence in these breadth measures has kept us cautious on the market, specifically because prices were unable to muster a rally even with several Global and US Stock Market Indexes forming bullish momentum divergences as well. The weight of the evidence was telling us that the "market of stocks" remained weak, and we've finally seen the selling accelerate over the last two weeks.

While several of these breadth measures are at extreme readings or "washout levels" that may lead to a short-term counter-trend move, we still want to see breadth diverge like it has at other significant turning points (see 2016 & 2018) before getting too excited. For now breadth continues to confirm the lower prices we're seeing in the major indexes.

We'll be watching to see how these charts develop in the coming weeks. Premium Members can access our full Market Internals Workbook for the rest of our breadth charts which are updated weekly.

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Thanks for reading and let us know your thoughts!

Allstarcharts Team