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