Market breadth – Still No Breakdown:

Just the repeat once again on market breadth “The Advance / Decline Line (AD line) is one of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.”

The last time we looked – the breadth problem was acute as we needed the A/D line to hold at the early August lows to complete a shallow A-B-C type correction. Now as displayed in the latest chart as of the Friday Oct 3, 2014 close, we can see both the S&P500 and the NYSE Advance / Decline line holding just above the respective early August lows. So far we have just a rolling sector rotational correction as the energy & materials trade inversely to the consumer, financial and health care sectors. Most notable is the Dow Transports bouncing back above the short 50 day M/A which is well above the longer 200 day M/A