In early 2026 the big stock indexes stayed almost flat, but the market’s health is slipping. Fewer companies are moving up, and that can hurt a rally.
One way to see this is the advance‑decline line. It adds up every stock that goes higher and subtracts every stock that falls. When the line goes down, it means most stocks are losing ground.
Another tool is the moving‑average breadth. It smooths out the daily ups and downs, giving a clearer picture of the trend. If the average turns negative, the overall market momentum may be fading.
The bullish percent index works similarly. It counts how many stocks are above their short‑term average. A low percent means only a few stocks are strong enough to lift the whole market.
Dave also compares two ways to measure performance. A cap‑weighted index (like the S&P 500) gives more weight to big companies, while an equal‑weighted index treats every stock the same. When the equal‑weighted chart falls faster, it shows that smaller stocks are lagging.
Key price levels, such as major support and resistance zones, together with the breadth signals, help decide if the market will keep climbing or start to fall.
In short, when market breadth gets weak, it warns that the rally might not last. Watching these indicators can give an early hint of a broader market shift.
Source: Materials provided by https://articles.stockcharts.com.Note: Content may be edited for style and length.