Selective Breadth Firming: Add Mid-Cap Longs; Reduce Crowded Large-Cap Leaders Before Vol Expands
IMGELD Market Breadth Update Based on Last 5 Days Till the Data: 2026-02-24
Executive Summary Date: 2026-02-25
Breadth is cautiously constructive over the last five sessions. NYSI (McClellan Summation Index) advanced for three sessions, plateaued, then eased modestly, retaining a positive bias. NYAD (Advance–Decline Line) registered four positive prints, culminating in a strong +839, pointing to improving participation. Volatility tone is neutral to mildly supportive: VIX (CBOE Volatility Index) compressed into 19-handle before a small uptick, and RVX (Russell Volatility Index) followed a similar path.
Tactically, selective mid-cap long setups may be emerging in industries showing steady new highs with contained new lows. Large-cap short opportunities remain valid in crowded leadership where new highs fail to expand and volatility re-edges higher. Selectivity and staged entries remain prudent.
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Global Read
Participation is broadening, but not decisively. Leadership remains somewhat concentrated, with NYHGH (New 52-Week Highs) recovering from the midweek dip yet not exceeding the week’s initial peak, while NYLOW (New 52-Week Lows) ticked higher into the latest session. Volatility compressed early, then stabilized with a modest re-expansion, consistent with a risk-on but vigilant tape. A minor divergence emerged as NYSI slipped on the last day while NYAD surged, suggesting short-term whipsaw risk. The five-day pattern remains one of early accumulation rather than full continuation, requiring discrimination by industry and factor.
Indicator Breakdown
NYSI (McClellan Summation Index) Improved across the first three sessions, stalled, then dipped to 680.01. Structure remains constructive but is pausing; follow-through is needed to confirm durability.
NYAD (Advance–Decline Line) Daily participation strengthened: 4 of 5 positive sessions, capped by a robust +839. This supports the view that buying interest is broadening despite day-to-day volatility.
NYHGH (New 52-Week Highs) Leadership expansion is modest. After dropping to 136 midweek, highs recovered to 169 but remain below 188 from the first day. The absence of an accelerating highs count argues for continued selectivity in leadership plays.
NYLOW (New 52-Week Lows) Downside pressure eased midweek (33–50) but rebounded to 78 on the latest day, indicating residual stress in laggards and uneven risk appetite.
Volatility Regime VIX moved from 20.29 to 19.09 before edging up to 19.55; RVX from 25.93 to 25.31 then to 25.82. The overall regime suggests mild compression with a cautious uptick, supportive of selective risk-taking but attentive to reversal risk if vol expands further.
Tactical Takeaway
Longs: Focus on mid-cap industries where breadth is improving and new highs are holding (e.g., select capital goods, specialty chemicals, and software infrastructure with rising internal A-D and controlled drawdowns).
Shorts: Large-cap leadership pockets that are crowded and momentum-dependent remain vulnerable if NYHGH fails to expand and volatility lifts.
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