market-breadth-analyzer

---
name: market-breadth-analyzer
description: Use when the user asks if a rally is broad-based, wants a quantitative market breadth score, an advance-decline/breadth-thrust read, or an equity exposure level from breadth data.
category: Market & Macro
version: 1.0.0
tools: []
---

# Market Breadth Analyzer

Quantify market breadth health with a data-driven, 6-component 0-100 score, measuring how broadly the market is participating in a rally or decline. 100 = maximum health/broad participation, 0 = critical weakness.

## When to Use
- "Is the market rally broad-based?" / "How healthy is market breadth?"
- User wants to assess market participation rate, advance-decline indicators, or breadth thrust
- User wants to know if the market is narrowing (fewer stocks participating)
- User wants an equity exposure level based on breadth conditions

## Difference from Chart-Based Breadth Analysis
This produces a fully reproducible, quantitative 0-100 score from data directly, rather than a qualitative read of a chart image — use it when the user wants a number and a repeatable process rather than visual pattern recognition.

## 6-Component Scoring System
| # | Component | Weight | Key Signal |
|---|---|---|---|
| 1 | Breadth Level & Trend | 25% | Current 8MA level + 200MA trend direction + 8MA direction modifier |
| 2 | 8MA vs 200MA Crossover | 20% | Momentum via MA gap and direction |
| 3 | Peak/Trough Cycle | 20% | Position in the breadth cycle |
| 4 | Bearish Signal | 15% | Backtested bearish-signal flag |
| 5 | Historical Percentile | 10% | Current reading vs. full historical distribution |
| 6 | S&P 500 Divergence | 10% | Multi-window (20-day + 60-day) price-vs-breadth divergence |

If any component lacks sufficient data (e.g. no peak/trough markers detected), exclude it and redistribute its weight proportionally among the remaining components — note both the original and the effective weights used.

## Health Zone Mapping
| Score | Zone | Equity Exposure | Action |
|---|---|---|---|
| 80-100 | Strong | 90-100% | Full position; growth/momentum favored |
| 60-79 | Healthy | 75-90% | Normal operations |
| 40-59 | Neutral | 60-75% | Selective positioning, tighten stops |
| 20-39 | Weakening | 40-60% | Profit-taking, raise cash |
| 0-19 | Critical | 25-40% | Capital preservation, watch for a trough |

## Methodology
Use web_search / knowledge_base_search to pull the underlying breadth dataset — roughly 2,500 daily rows of S&P 500 price, raw breadth index, 200MA and 8MA breadth readings, trend flags, bearish-signal flags, and peak/trough markers, plus an aggregate summary (average peak/trough levels, counts, analysis period). Flag if the data looks more than ~5 days stale.

Score each of the six components per the table above, combine into the composite 0-100 score with any weight redistribution applied, and classify into a health zone. When prior readings are available, characterize the trend as improving, deteriorating, or stable.

## Output
Present: the composite score and health zone, the strongest and weakest components, the recommended equity exposure level, key breadth levels to watch, any data-freshness warning, and — when available — the improving/deteriorating/stable trend read.