With the S & P 500 already about 10% off its February high, investors are anxiously awaiting some sign of a tradeable low. Based on our analysis of market breadth indicators in mid-March, investors may have to wait a bit longer for a meaningful market bottom. Today we’ll break down three market breadth indicators that suggest further potential downside before this downtrend phase is exhausted. One of the simplest measures of market breadth, the cumulative advance-decline line, is created by calculating a running total of the daily data on advancers versus decliners. This allows us to chart the trend of the daily readings over time, and better understand when the breadth readings confirm the price action in the major equity averages. Here we can see the cumulative advance-declines for the New York Stock Exchange, S & P 500 large cap index, the S & P 400 midcap index, and S & P 600 small cap index. Note how the midcap and small cap A-D lines have already broken below their January lows, while the NYSE A-D line is very close to doing so. Basically, this chart tells us that since November 2024, breadth data has been deteriorating for all of these cap tiers. A breakdown in the NYSE advance-decline line could come as early as today, which would bring an additional bearish confirmation for stocks as we approach the end of Q1. Next, we can look at the percent of S & P 500 members that are above their 50 and 200-day moving averages. This chart provided a fantastic early warning in late 2024 of the weakness to come in early 2025. The bottom panel shows the percent of stocks above their 50-day moving average, which was up around 85% at the end of Q3 2024. This indicator plunged to below 20% by mid-December as the S & P 500 pulled back, and then only reached up to 60% when the S & P 500 made a new high in January. This bearish divergence suggested limited upside potential for the major equity averages due to a notable lack of breadth support. The panel above shows the percent of S & P 500 stocks above their 200-day moving average, providing a more long-term gauge of market breadth conditions. This week, the indicator has dropped below the crucial 50% level, a signal which usually only comes during a confirmed bearish phase for the S & P 500. The last time we observed this negative signal was in September 2023, when the S & P 500 declined another six weeks before achieving an eventual low. Finally, let’s consider a market breadth indicator based on point and figure charts, known as the Bullish Percent Index. This indicator looks at the point and figure charts of all S & P 500 members, and determines how many of them have most recently posted a buy signal using the point and figure methodology. Based on our analysis of the indicator, there could be further downside for the S & P 500 before the traditional bullish signal can be reached. When the Bullish Percent Index goes below the 30% level, that tells us to prepare for a major low because over 70% of S & P 500 have registered a sell signal on their point and figure charts. When the BPI rotates back above the 30% level, it means that enough S & P 500 stocks are registering buy signals that the index should begin to rise as a result. We’ve highlighted with pink vertical lines when the Bullish Percent Index has reversed higher to confirm a bullish reversal. The last time we saw the BPI register a confirmed bullish signal was in November 2023, right after the October low. We did not observe any bullish reversals in 2024, as the market uptrend was so strong that the Bullish Percent Index never retreated down to that crucial 30% level. Given the fact that the Bullish Percent Index is finally approaching the 30% threshold, we would expect a decent countertrend rally opportunity if and when the indicator would push below 30% and then once again turn higher. Until that point, we see further downside potential as more S & P 500 stocks register bearish point and figure charts. The deterioration of market breadth indicators going back to the fourth quarter of 2024 has provided a fantastic confirmation of the bearish conditions affecting the major equity averages. Based on our analysis of the latest readings for these breadth indicators, investors may indeed need to brace for further downside for stocks. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. 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