market-breadth

name	market-breadth
description	Use this skill when the user asks about market breadth, advance/decline, new highs and lows, breadth thrust, market participation, whether a rally is broad or narrow, or divergences between the index and its constituents.
license	MIT
metadata	{"author":"quantagent","version":"1.0"}
allowed-tools	compute_advance_decline, compute_new_highs_lows, compute_breadth_thrust, compute_percent_above_ma, warm_breadth_cache, count_distribution_days, detect_follow_through_day

Market Breadth Analysis

Overview

Breadth measures how many stocks participate in a move. Indexes are cap-weighted, so a handful of mega-caps can mask broad deterioration — breadth divergences are among the earliest warning signals available.

Data Requirement (important)

Universe-level breadth reads a local cache. If a breadth tool reports no data or a proxy flag, tell the user the first computation needs a one-time warm-up (up to ~10 minutes for the S&P 500) and offer to run warm_breadth_cache. After that, updates are incremental and fast. The sector_etfs universe always works instantly and is a reasonable proxy.

Indicators and Interpretation

• Advance/Decline line (compute_advance_decline): cumulative net advancers. The signal is divergence: index making new highs while the A/D line does not = narrowing leadership, late-stage rally. A/D confirming new highs = healthy trend.
• New highs/lows (compute_new_highs_lows): expansion of 52-week lows while the index is near highs is a classic top warning (Hindenburg-style). HighLowRatio > 0.7 = healthy; < 0.3 = stress.
• Percent above MA (compute_percent_above_ma): >70% above the 200-day = broad bull (watch for overbought >90%); <30% = washed out, often near capitulation lows. The 50-day version swings faster and marks tactical extremes.
• Breadth thrust (compute_breadth_thrust): oscillator above +50 = bullish thrust (powerful initiation signal off lows, especially with a Follow-Through Day); below -50 = intense selling.

Reading Combinations

A/D line	New lows	% above 200MA	Reading
New highs	Contracting	Rising >60%	Healthy bull — confirm exposure
Flat/falling vs index highs	Expanding	Falling <50%	Divergence — reduce risk
Falling hard	Spiking	<25%	Capitulation zone — watch for thrust + FTD

How to Report

1. State whether breadth confirms or diverges from the index — that is the headline.
2. Give the two or three most decisive numbers (A/D trend, net new highs, % above 200MA), not every series.
3. Tie the conclusion to exposure: divergence = trim into strength; thrust after washout = start rebuilding.
4. Note the data source (full universe vs sector-ETF proxy) when a proxy was used.