Market Breadth

Market breadth means how many stocks are participating in a market move. In simple terms, market breadth shows whether a rally or decline is broad or narrow. Market breadth is important because a market rise led by many stocks may look healthier than a rise led by only a few large companies. Weak breadth can suggest that the overall market is not as strong as the main index appears. For example, if the S&P 500 rises but most stocks in the index fall, market breadth is weak. Market breadth is not the same as index performance. An index can rise even when market breadth is poor if a few large stocks move higher.