Market Breadth Analyzer#

Overview#

This skill quantifies the health of market breadth using public data from TraderMonty's GitHub repository. It generates a composite score from 0-100 (100 = healthy) across six key components, providing a quick, data-driven assessment of market participation.

Key Features:

• Composite Score (0-100): Single, easy-to-understand metric for breadth health.

• 6-Component Analysis:

  1. % Stocks > 50-day MA
  2. % Stocks > 200-day MA
  3. 1-Month New Highs - New Lows
  4. Advance-Decline Line (ADL) Momentum
  5. % Bullish (AAII Sentiment)
  6. S&P 500 distance from 200-day MA

• No API Key Required: Uses a publicly available CSV, making it free and reliable.

• Historical Context: Compares the current score to its 3-month and 6-month moving averages.

---

When to Use This Skill#

Explicit Triggers:

• "What's the current market breadth?"
• "Is this rally broad-based?"
• "Analyze market participation."
• "Show me the advance-decline health."
• User asks about "market breadth," "A-D line," "% stocks above moving average."

Implicit Triggers:

• User is concerned about a narrow, top-heavy market rally (e.g., led by only a few mega-cap stocks).
• User is assessing the risk of a market downturn, as poor breadth is often a leading indicator.

When NOT to Use:

• For real-time, intraday breadth data (this is end-of-day).
• For individual stock analysis.
• For deep technical analysis of a single indicator (this skill provides a composite view).

---

Workflow#

Step 1: Execute the Analysis Script#

The entire process is handled by a single Python script.

bash

# Run the breadth analysis
python3 skills/market-breadth/scripts/breadth_analyzer.py

The script performs the following actions:

1. Downloads Data: Fetches the latest Market-Breadth-Data.csv from TraderMonty's public GitHub repo.

2. Calculates Components: For each of the 6 components, it calculates a normalized score (0-100) based on its current value relative to its 1-year range.

3. Computes Composite Score: A weighted average of the 6 component scores.

   • % > 50d MA: 25%
   • % > 200d MA: 25%
   • NH-NL: 20%
   • ADL Momentum: 15%
   • AAII Bullish: 10% (inverse scoring)
   • SPX distance from 200d MA: 5%

4. Generates Report: Outputs a JSON file and a human-readable Markdown summary.

Step 2: Analyze the Output#

The script produces two files:

• breadth_report_YYYY-MM-DD.json
• breadth_report_YYYY-MM-DD.md

JSON Output:

json

{
  "composite_score": 78.5,
  "assessment": "Healthy",
  "trend": "Improving",
  "components": {
    "stocks_above_50d_ma": 85,
    "stocks_above_200d_ma": 90,
    "new_highs_lows": 75,
    "ad_line_momentum": 60,
    "aaii_bullish_inverse": 70,
    "spx_distance_from_200d_ma": 95
  },
  "moving_averages": {
    "3_month": 65.2,
    "6_month": 58.9
  }
}

Markdown Report:

• Overall Score: 78.5 / 100 (Healthy)
• Trend: Improving (Current > 3-Month MA)
• Component Breakdown: A table showing the score for each of the 6 components.
• Key Takeaway: A short, human-readable summary of the current breadth situation.

Step 3: Present Findings to User#

Synthesize the Markdown report into a concise, clear answer.

Example Response: "Current market breadth is healthy, with a composite score of 78.5 out of 100. This is above the 3-month average of 65.2, indicating an improving trend.

• Strengths: A high percentage of stocks are trading above their 50-day (85/100) and 200-day (90/100) moving averages.
• Weakness: Advance-Decline Line momentum is only moderate (60/100).

Overall, this suggests the current market rally is broad-based and well-supported."

Interpretation Guide#

• > 70 (Healthy): Strong participation. Rally is likely sustainable.
• 50-70 (Moderate): Decent participation, but some signs of narrowing.
• 30-50 (Weak): Narrow, selective market. High risk of reversal.
• < 30 (Very Weak): Extremely poor participation. Market is vulnerable.

A divergence (e.g., S&P 500 making new highs while the breadth score is falling) is a significant warning sign.