This market feels bad. It feels bad because of its trendless state and the many mini-cycles that are characterized by a heavy rotation. However, in reality, the market is improving.

In fact, it may very well be the case that the market has already bottomed a long time ago; to be specific, on Oct. 13, 2022, the day we wrote "The Market Will Not Move 50% Lower Contrary To What The Gurus Are Telling You." If we are right with our assessment, then there will not be a stock market crash in 2023, contrary to popular belief.

Furthermore, on the market breadth chart we featured in "The Nasdaq Looks Better Than You Might Think," there is a similar breadth indicator on the NYSE Index that we must share with readers.

On the chart below, the NYSE index is illustrated in the lower pane, over the course of 12 months. There you can see a bullish reversal, one that started in April of 2022, at around 16.8 thousand points.

This reversal may not be complete, but that’s besides the point. The important thing is that the chart keeps on improving, and the reversal is about to reach the point of 75% completion. That is crucial to note, as explained in "2008 vs. 2022: Similarities and Differences."

The really interesting data point is the one on the upper pane of the chart: the Advance Minus Decline Issues in the NYSE Index. This market breadth indicator confirmed the Oct. 13 bottom. More importantly, in recent days, this indicator has been moving higher, nicely in sync with the index price.

With this, market breadth and the index are in sync after breadth was deteriorating in August and September of last year. That was concerning, very concerning. But the double bottom on Oct. 3 and Oct. 13 marked the start of market breadth improvement. That’s constructive, very constructive.

Moreover, and equally important, another breadth indicator is suggesting that there is plenty of upside potential. On the chart below, the new highs minus new lows indicator on the NYSE Index is presented. Here, we take a look at the big picture and pore over a few decades of data.

The 2022 lows are clearly reflected in the readings of this indicator. But, when you flip the view, you can see how much potential there is for this indicator to move up. Also, in recent decades, any period with new highs minus new lows was followed by an increasing number of issues making new highs.

We believe there is sufficient evidence that markets have bottomed on Oct. 13 and that the Nasdaq is the one that will follow its peers higher throughout 2023.

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