The S&P 500’s internals are awful... while it’s still less than 5% from its record closing high
The breadth of negative momentum within the index’s constituents is even worse than at the tariff-induced market bottom in April 2025.
By one measure, the S&P 500’s internals came into Friday’s session even more wrecked than they were when stocks nearly entered a bear market in April 2025.
The McClellan Oscillator is a gauge of whether the components of an index or exchange are showing improving or worsening momentum. A simplified version of this metric for the S&P 500 tracks the difference between the 19-day exponential moving average of the advance-decline line and the 39-day moving average. So when the advance-decline line is getting better (or less bad) over time, it’ll move higher, and vice versa if lower.
Despite the benchmark US stock index being down just 4.4% from its January 27 closing peak, the McClellan Oscillator for the S&P 500 sank to -47 on Thursday.
The good news: there have been about 17 discrete occasions where the market internals were this bad or worse while the index was still within 5% of its closing peak, and forward returns have generally been positive. The S&P 500’s median one-month and three-month returns are +2.2% and +5.5%, respectively, during these occasions.
