---
name: nicepkg/breadth-chart-analyst
source: https://app.decimal.ai/s/nicepkg-breadth-chart-analyst@1/SKILL.md
source_sha256: 94269477c41b
---

# Breadth Chart Analyst

## Overview

This skill enables specialized analysis of two complementary market breadth charts that provide strategic (medium to long-term) and tactical (short-term) market perspectives. Analyze breadth chart images to assess market health, identify trading signals based on backtested strategies, and develop positioning recommendations. All thinking and output are conducted exclusively in English.

## Core Principles

1. **Dual-Timeframe Analysis**: Combine strategic (Chart 1: 200MA Breadth) and tactical (Chart 2: Uptrend Ratio) perspectives
2. **Backtested Strategy Focus**: Apply proven systematic strategies based on historical patterns
3. **Objective Signal Identification**: Focus on clearly defined thresholds, transitions, and markers
4. **English Communication**: Conduct all analysis and generate all reports in English
5. **Actionable Recommendations**: Provide specific positioning guidance for different investor types

## Chart Types and Purposes

### Chart 1: S&P 500 Breadth Index (200-Day MA Based)

**Purpose**: Medium to long-term strategic market positioning

**Key Elements**:
- **8-Day MA (Orange Line)**: Short-term breadth trend, primary entry signal generator
- **200-Day MA (Green Line)**: Long-term breadth trend, primary exit signal generator
- **Red Dashed Line (73%)**: Average peak level - market overheating threshold
- **Blue Dashed Line (23%)**: Average 8MA trough level - extreme oversold, excellent buying opportunity
- **Triangles**:
  - Purple ▼ = 8MA troughs (buy signal when reverses)
  - Blue ▼ = 200MA troughs (major cycle lows)
  - Red ▲ = 200MA peaks (sell signal)
- **Pink Background**: Downtrend periods

**Backtested Strategy**:
- **BUY**: When 8MA reverses from a trough (especially below 23%)
- **SELL**: When 200MA forms a peak (typically near/above 73%)
- **Result**: Historically high performance, avoids bear markets

### Chart 2: US Stock Market - Uptrend Stock Ratio

**Purpose**: Short-term tactical timing and swing trading

**Key Elements**:
- **Uptrend Stock Definition**: Stocks above 200MA/50MA/20MA with positive 1-month performance
- **Green Regions**: Market in uptrend phase
- **Red Regions**: Market in downtrend phase
- **~10% Level (Lower Orange Dashed)**: Short-term bottom, extreme oversold
- **~40% Level (Upper Orange Dashed)**: Short-term top, market overheating

**Swing Trading Strategy**:
- **ENTER LONG**: When color changes from red to green (especially from <10-15% levels)
- **EXIT LONG**: When color changes from green to red (especially from >35-40% levels)
- **Timeframe**: Days to weeks

## Analysis Workflow

### Step 1: Receive Chart Images and Prepare Analysis

When the user provides breadth chart images for analysis:

1. Confirm receipt of chart image(s)
2. Identify which chart(s) are provided:
   - Chart 1 only (200MA Breadth)
   - Chart 2 only (Uptrend Ratio)
   - Both charts
3. Note any specific focus areas or questions from the user
4. Proceed with systematic analysis

**Language Note**: All subsequent thinking, analysis, and output will be in English.

### Step 2: Load Breadth Chart Methodology

Before beginning analysis, read the comprehensive breadth chart methodology:

```
Read: references/breadth_chart_methodology.md
```

This reference contains detailed guidance on:
- Chart 1: 200MA-based breadth index interpretation and strategy
- Chart 2: Uptrend stock ratio interpretation and strategy
- Signal identification and threshold significance
- Strategy rules and risk management
- Combining both charts for optimal decision-making
- Common pitfalls to avoid

### Step 3: Examine Sample Charts (First Time or for Reference)

To understand the chart format and visual elements, review the sample charts included in this skill:

```
View: assets/SP500_Breadth_Index_200MA_8MA.jpeg
View: assets/US_Stock_Market_Uptrend_Ratio.jpeg
```

These samples demonstrate:
- Visual appearance and structure of each chart type
- How signals and thresholds are displayed
- Color coding and marker systems
- Historical patterns and cycles

### Step 4: Analyze Chart 1 (200MA-Based Breadth Index)

If Chart 1 is provided, conduct systematic analysis:

#### 4.1 Extract Current Readings

From the chart image, identify:
- **Current 8MA level** (orange line): Specific percentage
- **Current 200MA level** (green line): Specific percentage
- **8MA slope**: Rising, falling, or flat
- **200MA slope**: Rising, falling, or flat
- **Distance from 73% threshold**: How close to overheating
- **Distance from 23% threshold**: How close to extreme oversold
- **Most recent date** visible on the chart

#### 4.1.5 CRITICAL: Latest Data Point Detailed Trend Analysis

**This step is MANDATORY to avoid misreading recent trend changes.**

Focus intensively on the **rightmost 3-5 data points** of the chart (most recent weeks):

**For 8MA (Orange Line) - Analyze the very latest trajectory**:
1. **Identify the absolute latest position**: Where is the 8MA at the rightmost edge of the chart?
2. **Trace back 3-5 data points** (approximately 3-5 weeks):
   - What was the 8MA level 1 week ago?
   - What was the 8MA level 2 weeks ago?
   - What was the 8MA level 3 weeks ago?
3. **Calculate the directional change**:
   - Is the latest value HIGHER or LOWER than 1 week ago?
   - Is the latest value HIGHER or LOWER than 2 weeks ago?
   - What is the trend: consistently rising, consistently falling, or mixed?
4. **Determine the CURRENT slope** (not historical slope):
   - **Rising**: Latest data point is higher than previous 2-3 points AND shows upward curvature
   - **Falling**: Latest data point is lower than previous 2-3 points AND shows downward curvature
   - **Flat**: Latest data point is approximately equal to previous points (within 2-3%)

**Critical Questions to Answer**:
- [ ] Is the 8MA currently moving UP or DOWN at the rightmost edge?
- [ ] If there was a recent trough, has the 8MA **sustained** the upward move, or has it rolled over?
- [ ] Count consecutive periods of increase: How many consecutive periods has 8MA risen? (Need 2-3 for confirmation)
- [ ] Count consecutive periods of decrease: How many consecutive periods has 8MA fallen? (Indicates failed reversal if declining after trough)

**For 200MA (Green Line) - Analyze the very latest trajectory**:
1. **Identify the absolute latest position**: Where is the 200MA at the rightmost edge?
2. **Trace back 4-6 weeks**:
   - What was the 200MA level 2 weeks ago?
   - What was the 200MA level 4 weeks ago?
3. **Determine the CURRENT slope**:
   - Is it rising, falling, or flat in the most recent period?

**Failed Reversal Detection** (CRITICAL):
If an 8MA trough (purple ▼) was recently identified:
- [ ] Did the 8MA rise for only 1-2 periods and then turn back down?
- [ ] Did the 8MA fail to reach 60% before turning down?
- [ ] Is the 8MA currently declining again after the bounce?
- **If YES to any**: This is a **FAILED REVERSAL** - DO NOT ENTER, signal is INVALID

**Example Analysis Format**:
```
Latest 8MA Data Points (rightmost to left):
- Current (Week 0): 48%
- 1 week ago: 52%
- 2 weeks ago: 55%
- 3 weeks ago: 50%

Analysis: 8MA is FALLING. It rose from 50% to 55% (weeks 3-2), but has since declined to 48%.
This shows a failed reversal pattern - bounce was temporary, downtrend has resumed.
SLOPE: Falling (not rising!)
```

#### 4.2 Identify Signal Markers

Look for and document:
- **Most recent 8MA trough (purple ▼)**: Date and level
- **Most recent 200MA trough (blue ▼)**: Date and level (if visible in timeframe)
- **Most recent 200MA peak (red ▲)**: Date and level
- **Days/weeks since most recent signals**
- **Any pink background shading** (downtrend periods)

#### 4.3 Assess Market Regime

Based on readings and patterns, classify the current market as:
- Healthy Bull Market
- Overheated Bull Market
- Market Top/Distribution Phase
- Bear Market/Correction
- Capitulation/Extreme Oversold
- Early Recovery

Support the classification with specific evidence from the chart.

#### 4.4 Determine Strategy Position

Apply the backtested strategy rules with STRICT confirmation requirements:

**Check for BUY signal** (ALL criteria must be met):
1. ✓ **Trough Formation**: Has 8MA formed a clear trough (purple ▼)?
2. ✓ **Reversal Initiated**: Has 8MA begun to move upward from the trough?
3. ✓ **Confirmation Achieved**: Has 8MA risen for 2-3 CONSECUTIVE periods after the trough?
4. ✓ **No Recent Reversal**: Based on Step 4.1.5 analysis, is 8MA CURRENTLY rising (not falling)?
5. ✓ **Sustained Move**: Has 8MA maintained the upward trajectory without rolling over?
6. ⭐ **Optional but Strong**: Is 8MA below or near 23% (extreme oversold) at trough?

**BUY Signal Status**:
- **CONFIRMED**: All 5 required criteria met → ENTER LONG
- **DEVELOPING**: Trough formed, but < 2-3 consecutive increases → WAIT, MONITOR
- **FAILED**: Trough formed, but 8MA has rolled over and is declining → DO NOT ENTER, WAIT FOR NEXT TROUGH
- **NO SIGNAL**: No trough formed → WAIT

**Check for SELL signal**:
- Has 200MA formed a peak (red ▲)?
- Is 200MA near or above 73%?
- Is this an active sell signal requiring position exit?

**Current position determination**:
- **Long**: BUY signal confirmed, position entered and held
- **Preparing to Enter**: BUY signal developing (trough formed, watching for confirmation)
- **WAIT / Flat**: No valid signal OR failed reversal detected
- **Preparing to Exit**: SELL signal developing (200MA approaching peak)

#### 4.5 Develop Scenarios

Create 2-3 scenarios with probability estimates:
- Base case scenario (highest probability)
- Alternative scenario(s)
- Each scenario includes: description, supporting factors, strategy implications, key levels

### Step 5: Analyze Chart 2 (Uptrend Stock Ratio)

If Chart 2 is provided, conduct systematic analysis:

#### 5.1 Extract Current Readings

From the chart image, identify:
- **Current uptrend stock ratio**: Specific percentage
- **Current color**: Green (uptrend) or Red (downtrend)
- **Ratio slope**: Rising, falling, or flat
- **Distance from 10% threshold**: How close to extreme oversold
- **Distance from 40% threshold**: How close to overbought
- **Most recent date** visible on the chart

#### 5.2 Identify Trend Transitions

Look for and document:
- **Most recent red-to-green transition**: Date and ratio level at transition
- **Most recent green-to-red transition**: Date and ratio level at transition
- **Duration of current color phase**: How long in current trend
- **Days/weeks since most recent transition**

#### 5.3 Assess Market Condition

Based on current ratio and color, classify as:
- Extreme Oversold (<10%)
- Moderate Bearish (10-20%, red)
- Neutral/Transitional (20-30%)
- Moderate Bullish (30-37%, green)
- Extreme Overbought (>37-40%)

Support the classification with specific evidence from the chart.

#### 5.4 Determine Trading Position

Apply the swing trading strategy rules:

**Check for ENTER LONG signal**:
- Has color changed from red to green?
- Was the transition from an oversold level (<15%)?
- Is the transition confirmed (2-3 days of green)?

**Check for EXIT LONG signal**:
- Has color changed from green to red?
- Was the transition from an overbought level (>35%)?
- Is momentum weakening?

**Current position**: Long, Flat, Preparing to Enter, or Preparing to Exit

#### 5.5 Develop Scenarios

Create 2-3 scenarios with probability estimates:
- Base case scenario (highest probability)
- Alternative scenario(s)
- Each scenario includes: description, supporting factors, trading implications, key levels

### Step 6: Combined Analysis (When Both Charts Provided)

If both charts are provided, integrate the strategic and tactical perspectives:

#### 6.1 Alignment Assessment

Create a positioning matrix:
- **Chart 1 (Strategic)**: Bullish / Bearish / Neutral + signal status
- **Chart 2 (Tactical)**: Bullish / Bearish / Neutral + signal status
- **Combined Implication**: How do they align or conflict?

#### 6.2 Scenario Classification

Determine which of the four scenarios applies:

**Scenario 1: Both Bullish**
- Chart 1: 8MA rising, 200MA not yet peaked
- Chart 2: Green (uptrend), ratio rising from oversold
- Implication: Maximum bullish stance, aggressive positioning

**Scenario 2: Strategic Bullish, Tactical Bearish**
- Chart 1: 8MA rising, 200MA not yet peaked
- Chart 2: Red (downtrend), ratio falling or elevated
- Implication: Hold core long positions, wait for tactical entry

**Scenario 3: Strategic Bearish, Tactical Bullish**
- Chart 1: 200MA peaked or declining
- Chart 2: Green (uptrend), ratio rising
- Implication: Short-term tactical trades only, tight stops

**Scenario 4: Both Bearish**
- Chart 1: Both MAs declining
- Chart 2: Red (downtrend), ratio falling
- Implication: Defensive positioning, cash or shorts

#### 6.3 Unified Recommendation

Provide integrated positioning guidance for:
- **Long-term investors** (based primarily on Chart 1)
- **Swing traders** (based primarily on Chart 2)
- **Active tactical traders** (based on combination)

Address any conflicts between charts and explain resolution.

### Step 7: Generate Analysis Report in English

Create a comprehensive markdown report using the template structure:

```
Read and use as template: assets/breadth_analysis_template.md
```

**IMPORTANT**: All analysis and output must be in English.

The report structure varies based on which chart(s) are analyzed:

**If Chart 1 only**:
- Executive Summary
- Chart 1 full analysis sections
- Summary and Conclusion
- Omit Chart 2 and Combined Analysis sections

**If Chart 2 only**:
- Executive Summary
- Chart 2 full analysis sections
- Summary and Conclusion
- Omit Chart 1 and Combined Analysis sections

**If Both Charts**:
- Executive Summary
- Chart 1 full analysis sections
- Chart 2 full analysis sections
- Combined Analysis section (mandatory)
- Summary and Conclusion

**File Naming Convention**: Save each analysis as:
- Chart 1 only: `breadth_200ma_analysis_[YYYY-MM-DD].md`
- Chart 2 only: `uptrend_ratio_analysis_[YYYY-MM-DD].md`
- Both charts: `breadth_combined_analysis_[YYYY-MM-DD].md`

### Step 8: Quality Assurance

Before finalizing the report, verify:

1. ✓ **Language**: All content is in English (thinking and output)
2. ✓ **Latest Data Trend Analysis**: Step 4.1.5 was thoroughly completed - the most recent 3-5 data points were analyzed to determine CURRENT trend direction
3. ✓ **Trend Direction Accuracy**: The stated 8MA slope (Rising/Falling/Flat) accurately reflects the RIGHTMOST data points, not historical movement
4. ✓ **Failed Reversal Check**: If a trough was identified, explicitly verified whether the reversal sustained or failed by analyzing latest trajectory
5. ✓ **Specific Values**: All readings include specific percentages/levels, not vague descriptions
6. ✓ **Signal Status**: Clear identification of active signals (CONFIRMED BUY / DEVELOPING / FAILED / SELL / WAIT)
7. ✓ **Strategy Alignment**: Recommendations align with backtested strategies and confirmation requirements
8. ✓ **Probabilities**: Scenario probabilities sum to 100%
9. ✓ **Actionable**: Clear positioning recommendations for different trader types
10. ✓ **Context**: Historical comparison and reference to similar past situations
11. ✓ **Risk Management**: Invalidation levels and risk factors clearly stated

## Quality Standards

### Objectivity Requirements

- Base all analysis strictly on observable chart data
- Do not incorporate external information (news, fundamentals) unless specifically relevant
- Use precise technical terminology consistently
- Distinguish clearly between factual observations and probabilistic forecasts
- Acknowledge uncertainty when signals are ambiguous

### Completeness Requirements

- Address all relevant sections of the analysis template
- Provide specific numerical values for all key metrics
- Justify probability estimates with technical factors
- Include invalidation levels for each scenario
- Compare current readings to historical patterns visible on the charts

### Clarity Requirements

- Write in professional, analytical English
- Use clear section headings and structure
- Present information in tables where appropriate
- Make recommendations specific and actionable
- Avoid jargon without explanation

### Strategy Adherence Requirements

- Apply backtested strategy rules correctly
- Distinguish between strategic (Chart 1) and tactical (Chart 2) signals
- Provide clear position status (Long/Flat/Entering/Exiting)
- Include specific entry/exit levels when applicable
- Address risk management (stop losses, position sizing)

## Example Usage Scenarios

### Example 1: Strategic Breadth Analysis (Chart 1 Only)

```
User: "Please analyze this S&P 500 breadth chart and tell me where we are in the market cycle."
[Provides Chart 1 image: 200MA Breadth Index]

Breadth Analyst (thinking in English):
1. Confirms receipt of Chart 1 (200MA-based breadth index)
2. Reads breadth_chart_methodology.md for Chart 1 guidance
3. Views sample chart for format reference
4. Extracts current readings:
   - 8MA: 68%
   - 200MA: 75%
   - 8MA slope: Flat to slightly declining
   - 200MA slope: Rising but may be forming peak
   - Distance from 73% threshold: +2% (above threshold = overheated)
5. Identifies signals:
   - Most recent 8MA trough: 3 months ago at 25%
   - Most recent 200MA peak: None visible yet, but 200MA at 75% suggests potential peak forming
6. Assesses regime: Overheated Bull Market approaching Distribution Phase
7. Determines strategy position: Long position should prepare to exit; watch for 200MA peak confirmation
8. Develops scenarios:
   - Base Case (55%): 200MA forms peak in next 1-2 weeks, sell signal activates
   - Alternative (35%): Further consolidation at elevated levels before eventual peak
   - Bear Case (10%): Immediate rollover without clear peak formation
9. Generates comprehensive report in English: breadth_200ma_analysis_2025-11-02.md
```

### Example 2: Tactical Uptrend Ratio Analysis (Chart 2 Only)

```
User: "Should I be buying or selling here? Analyze this uptrend ratio chart."
[Provides Chart 2 image: Uptrend Stock Ratio]

Breadth Analyst (thinking in English):
1. Confirms receipt of Chart 2 (Uptrend stock ratio)
2. Reads breadth_chart_methodology.md for Chart 2 guidance
3. Views sample chart for format reference
4. Extracts current readings:
   - Current ratio: 12%
   - Current color: Green (uptrend)
   - Ratio slope: Rising sharply
   - Just transitioned from red to green 3 days ago at 11%
5. Identifies transitions:
   - Most recent red-to-green: 3 days ago at 11% (from extreme oversold)
   - Prior green-to-red: 2 weeks ago at 28%
6. Assesses condition: Early in new uptrend from extreme oversold
7. Determines trading position: ENTER LONG signal active, excellent risk/reward
8. Develops scenarios:
   - Base Case (65%): Ratio continues higher to 30-35% over next 2-3 weeks
   - Alternative (25%): Choppy advance, consolidates around 20% before next leg
   - Bear Case (10%): False breakout, returns to red quickly
9. Generates tactical report in English: uptrend_ratio_analysis_2025-11-02.md
```

### Example 3: Combined Strategic + Tactical Analysis (Both Charts)

```
User: "Analyze both of these breadth charts and give me your overall market view."
[Provides both Chart 1 and Chart 2 images]

Breadth Analyst (thinking in English):
1. Confirms receipt of both charts
2. Reads full breadth_chart_methodology.md
3. Views both sample charts
4. Analyzes Chart 1:
   - 8MA: 55%, rising from trough 2 weeks ago at 30%
   - 200MA: 60%, still rising
   - Regime: Early Recovery to Healthy Bull Market
   - Strategy: Long position, hold
5. Analyzes Chart 2:
   - Ratio: 22%, green (uptrend)
   - Transitioned red-to-green 10 days ago from 14%
   - Condition: Moderate Bullish, building momentum
   - Trading: Hold long, entered on transition
6. Combined assessment:
   - Scenario 1: Both Bullish ✓
   - Strategic: Bullish (8MA reversal confirmed)
   - Tactical: Bullish (uptrend established from oversold)
   - Alignment: Strong alignment = Maximum conviction
7. Unified recommendation:
   - Long-term investors: Aggressive long positioning, core holdings
   - Swing traders: Hold longs entered on red-to-green, target 35%+
   - Active traders: Full position, favorable environment for longs
8. Develops integrated scenarios with probabilities
9. Generates comprehensive combined report in English: breadth_combined_analysis_2025-11-02.md
```

## Resources

This skill includes the following bundled resources:

### references/breadth_chart_methodology.md

Comprehensive methodology covering:
- **Chart 1 (200MA Breadth)**: Components, interpretation, market regimes, backtested strategy, analysis checklist
- **Chart 2 (Uptrend Ratio)**: Components, interpretation, market conditions, swing trading strategy, analysis checklist
- **Combined Analysis**: Alignment scenarios, integrated decision-making
- **Common Pitfalls**: Mistakes to avoid for each chart type

**Usage**: Read this file before conducting any breadth chart analysis to ensure systematic, accurate interpretation.

### assets/breadth_analysis_template.md

Structured template for breadth analysis reports in English:
- Executive Summary
- Chart 1 analysis sections (if applicable)
- Chart 2 analysis sections (if applicable)
- Combined Analysis section (when both charts analyzed)
- Summary and Conclusion
- All sections include tables, checklists, and structured formats

**Usage**: Use this template structure for every analysis report. Adapt sections based on which chart(s) are being analyzed.

### assets/SP500_Breadth_Index_200MA_8MA.jpeg

Sample Chart 1 image showing:
- 8-day MA (orange) and 200-day MA (green) lines
- Threshold levels (73% red dashed, 23% blue dashed)
- Signal markers (triangles for troughs and peaks)
- Pink background downtrend shading
- Historical patterns from 2016-2025

**Usage**: Reference this sample to understand Chart 1 visual format and identify similar patterns in user-provided charts.

### assets/US_Stock_Market_Uptrend_Ratio.jpeg

Sample Chart 2 image showing:
- Green and red color-coded trend phases
- Uptrend ratio percentage on y-axis
- Threshold levels (~10% and ~40% orange dashed lines)
- Short-term momentum patterns
- Historical patterns from 2023-2025

**Usage**: Reference this sample to understand Chart 2 visual format and identify similar patterns in user-provided charts.

## Special Notes

### Language Requirement

**CRITICAL**: All analysis, thinking, and output MUST be in English. This includes:
- Internal analysis and reasoning
- Report generation
- Tables and data presentation
- Scenario descriptions
- Recommendations

Do not translate or use any other language. The user expects English output exclusively.

### Strategy Focus

This skill emphasizes backtested, systematic strategies rather than discretionary interpretation. Always:
- Apply the strategy rules as documented
- Reference historical performance patterns
- Provide specific entry/exit criteria
- Include risk management guidance

### Practical Application

The goal is actionable intelligence. Every analysis should answer:
- **Strategic**: Should I be long, flat, or short the market over the medium term?
- **Tactical**: Should I enter or exit positions in the short term?
- **Timing**: When should I act, and at what levels?
- **Risk**: What would invalidate this view, and where should stops be?