What it measures
An index like the S&P 500 is weighted by size, so a few giant companies can push it up while most stocks fall. Market breadth looks under the surface: how many stocks are taking part?
Common measures
| Indicator | What it shows |
|---|---|
| Advance-decline line | Running total of rising minus falling stocks each day |
| Percent above 200-day average | Share of stocks in a long-term uptrend. See The 200-day moving average |
| New highs minus new lows | Stocks at 52-week highs versus lows |
| Equal-weight vs cap-weight index | Whether the average stock keeps up with the giants |
Reading it
- Broad rally: most stocks rise with the index. Healthier and more durable.
- Narrow rally: the index rises on a handful of leaders while breadth weakens. Often vulnerable.
- Washed out: under 20% of stocks above their 200-day average has marked many major lows.
Limits
Narrow markets can continue for years, as in the late 1990s. Breadth is context, not a timing signal.
See also
- The 200-day moving average Why the 200-day moving average is the most-watched trend line in investing, what the research shows about markets above and below it, and its weaknesses.
- Market leadership cycles Why the companies that lead one decade rarely lead the next, how sector leadership rotates, and what that means for concentration and diversification.
- Reading a market overview How to read a daily market overview: the major indexes, sectors, volatility, rates and sentiment, and a short routine that takes five minutes.
Last updated September 30, 2026. Education only, not investment advice.