We’re not going to dive into the complete explanation again ….we’ve already explained the chart (and its value) plenty in the blog lately. We simply want to post an update of the breadth and depth comparisons, because they’ve each turned bearish - via crosses of their moving averages - within the last week. And, Monday did little to stop that bearish trend in its tracks.

In fact, Monday was anomaly worth dissecting.

While the NASDAQ closed higher (up 7.38 points, to 2354.23), we actually saw more decliners than advancers…. 1315 to 1415.

How does the index make progress with more losers than winners? Two reasons. The first one is, ‘up’ volume was grater than down volume… 1.4 billion to 980 million. The second reason is, the large caps in the cap-weighted index did most of the heavy lifting.

While it worked for the bulls on Monday, it’s not a scenario that offers hope for a lot of longevity - most of the Composite’s stocks need to participate in a rally if it’s to have nay staying power.  Besides, the breadth as well as the depth trends over the last three weeks (and it’s the trend that matters most) are still decidedly tipped in favor of the bears.

Until the green lines move back above the red lines, any rebound effort will remain suspect.

Don’t miss out on the market’s tidal shift from bearishness to bullishness, which will show up on this breadth and depth chart before it actually shows up on an index chart. How? Just subscribe to the free Micro Cap Press newsletter.