Divergent Breadth, Volatility Compressing: Mid-Cap Longs Emerge as Leadership Narrows
IMGELD Market Breadth Update Based On Last Closing Date: 2025-11-25
Executive Summary
Breadth over the last five sessions remains conflicted. NYSI (McClellan Summation Index) declined steadily deeper into negative territory, signaling ongoing intermediate-term deterioration. NYAD (Advance-Decline Line) flipped from heavy midweek negatives to two strong positives, finishing net positive over five days and hinting at short-term repair. Volatility faded, with VIX (CBOE Volatility Index) and RVX (Russell Volatility Index) compressing into the low-to-mid 20s, easing stress but not confirming a durable shift.
Tactical read: Selective long opportunities may be emerging in mid-cap industries where new highs are incrementally expanding and new lows are contracting. Short opportunities remain valid in crowded large-cap leadership where participation is narrowing. Selectivity and risk control remain paramount.
Global Read
Participation is tentatively broadening: NYAD’s late-week strength and a sharp drop in NYLOW (New 52-Week Lows) offset earlier weakness. Leadership is still concentrated but shows early signs of rotation as NYHGH (New 52-Week Highs) edges higher from a low base. Volatility is compressing after a midweek spike, favoring mean reversion over trend continuation in the near term. There is a notable divergence: NYSI declines firmly while NYAD improves late, indicating short-term accumulation attempts against a weakening intermediate backdrop. By the five-day consistency rule, signals remain mixed; any accumulation is tentative, not confirmed.
Indicator Breakdown
1. NYSI (McClellan Summation Index)
Firm deterioration across all five sessions (-7.7 to -153.03). The subzero slide underscores a defensive intermediate structure despite late-session rallies elsewhere.
2. NYAD (Advance-Decline Line)
Sequence: +184, -650, -1542, +1690, +735. Broad participation weakened midweek, then strengthened materially into week’s end, leaving a net positive five-day read and signaling short-term breadth repair.
3. NYHGH (New 52-Week Highs)
Stable but low, improving from 33–44 to 47 by the last session. Leadership expansion is modest, insufficient to declare a broad advance, but directionally constructive.
4. NYLOW (New 52-Week Lows)
Meaningfully improved from 168 to 39, indicating easing downside pressure and improving risk appetite. Sustained suppression of new lows would strengthen the case for follow-through.
5. Volatility Regime
VIX moved from 26.42 to 20.52; RVX from 29.59 to 24.94. The compression bias supports tactical rebounds and tighter ranges, but with NYSI still falling, volatility can re-expand quickly on negative catalysts.
CTA
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