Chart of the Day – Wednesday, May 29, 2024

You can see the Bearish Divergence on % Stocks > 200 SMA was happening then and is also happening now, as well. pic.twitter.com/qh03080JmN

— Jay R. Ligon (@TheeDisruptor) May 29, 2024

Today’s Chart of the Day was shared by Jay Ligon (@TheeDisruptor).

• The S&P 500 is only -1.0% off all-time highs, and yet it’s skating on thin ice as it tests the March highs. Closing below would qualify as a Failed Breakout.

• The recent strength from $NVDA and other Mega-Cap stocks has masked some of the weakness beneath the surface of the S&P 500.

• While the index reached all-time highs in May, fewer members were above their 200-day moving averages. The percentage of stocks above their 20-day and 50-day moving averages has also been diverging.

The takeaway: The S&P 500 is still +10% above its 200-day moving average, but the index is testing a critical level, while breadth has been deteriorating and diverging for several weeks.