This skill should be used when analyzing market breadth charts, specifically the S&P 500 Breadth Index (200-Day MA based) and the US Stock Market Uptrend Stock Ratio charts. Use this skill when the user provides breadth chart images for analysis, requests market breadth assessment, positioning strategy recommendations, or wants to understand medium-term strategic and short-term tactical market outlook based on breadth indicators. All analysis and output are conducted in English.
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Just instructions. No commands, network, or file access.
Files
SKILL.md
breadth-chart-analyst
This skill should be used when analyzing market breadth charts, specifically the S&P 500 Breadth Index (200-Day MA based) and the US Stock Market Uptrend Stock Ratio charts. Use this skill when the user provides breadth chart images for analysis, requests market breadth assessment, positioning strategy recommendations, or wants to understand medium-term strategic and short-term tactical market outlook based on breadth indicators. All analysis and output are conducted in English.
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.
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.
CRITICAL WARNING: Charts can be deceptive. The MAJORITY of analysis errors occur because the analyst:
Confuses the 8MA (orange) with the 200MA (green)
Reads historical trends instead of the CURRENT rightmost data points
Misidentifies which line is rising vs falling
BEFORE analyzing trend direction, FIRST confirm line colors:
✓ 8MA = ORANGE line (fast-moving, more volatile)
✓ 200MA = GREEN line (slow-moving, smoother)
If unsure which is which, STOP and re-examine the chart legend/colors
Focus intensively on the rightmost 3-5 data points of the chart (most recent weeks):
For 8MA (Orange Line) - Analyze the very latest trajectory:
Identify the absolute latest position: Where is the 8MA at the rightmost edge of the chart?
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?
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?
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:
Identify the absolute latest position: Where is the 200MA at the rightmost edge?
Trace back 4-6 weeks:
What was the 200MA level 2 weeks ago?
What was the 200MA level 4 weeks ago?
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!)
MANDATORY CROSS-CHECK (to catch misreadings):
After determining the trend, ask yourself:
"If I claimed 8MA is RISING, but it's actually been FALLING for weeks, what would that look like?"
Answer: The rightmost data points would be LOWER than previous points (confirming FALLING)
"Does my analysis match the visual slope of the orange line at the rightmost edge?"
If orange line visually slopes DOWN at the right edge → It's FALLING
If orange line visually slopes UP at the right edge → It's RISING
"Is there any pink background shading (downtrend) near the rightmost edge?"
If YES → This confirms downtrend conditions, 8MA is likely FALLING
"Are the 8MA and 200MA converging (getting closer) or diverging?"
Converging from below → Potential death cross forming → BEARISH
Converging from above → Potential golden cross forming → BULLISH
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):
✓ Trough Formation: Has 8MA formed a clear trough (purple ▼)?
✓ Reversal Initiated: Has 8MA begun to move upward from the trough?
✓ Confirmation Achieved: Has 8MA risen for 2-3 CONSECUTIVE periods after the trough?
✓ No Recent Reversal: Based on Step 4.1.5 analysis, is 8MA CURRENTLY rising (not falling)?
✓ Sustained Move: Has 8MA maintained the upward trajectory without rolling over?
⭐ Optional but Strong: Is 8MA below or near 23% (extreme oversold) at trough?
BUY Signal Status:
CONFIRMED: All 5 required criteria met → ENTER LONG
Both charts: breadth_combined_analysis_[YYYY-MM-DD].md
Step 8: Quality Assurance
Before finalizing the report, verify:
✓ Language: All content is in English (thinking and output)
✓ Line Color Verification: Explicitly confirmed 8MA = ORANGE, 200MA = GREEN before trend analysis
✓ 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
✓ Trend Direction Accuracy: The stated 8MA slope (Rising/Falling/Flat) accurately reflects the RIGHTMOST data points, not historical movement
✓ Cross-Check Completed: MANDATORY CROSS-CHECK questions were answered to confirm trend direction matches visual slope
✓ Death/Golden Cross Check: If 8MA and 200MA are converging, explicitly identified whether death cross or golden cross is forming
✓ Failed Reversal Check: If a trough was identified, explicitly verified whether the reversal sustained or failed by analyzing latest trajectory
✓ Specific Values: All readings include specific percentages/levels, not vague descriptions
✓ Signal Status: Clear identification of active signals (CONFIRMED BUY / DEVELOPING / FAILED / SELL / WAIT)
✓ Strategy Alignment: Recommendations align with backtested strategies and confirmation requirements
✓ Probabilities: Scenario probabilities sum to 100%
✓ Actionable: Clear positioning recommendations for different trader types
✓ Context: Historical comparison and reference to similar past situations
✓ Risk Management: Invalidation levels and risk factors clearly stated
FINAL SANITY CHECK:
If report claims "BUY signal" or "8MA rising", confirm this doesn't contradict user's chart showing death cross or downtrend
If report claims "bullish", confirm there's no pink background shading or death cross visible
If unsure about ANY trend direction, explicitly state uncertainty rather than guessing
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
Common Analysis Errors and How to Avoid Them
Error 1: Confusing 8MA with 200MA
Symptom: Report claims 8MA is rising when it's actually the 200MA that's rising
Prevention:
ALWAYS verify: 8MA = ORANGE, 200MA = GREEN
Check line volatility: 8MA moves faster with more volatility
If unsure, state: "Based on line color, I identify the [orange/green] line as [8MA/200MA]"
Error 2: Reading Historical Trends Instead of Current Direction
Symptom: Report describes what happened 1-2 months ago, not what's happening NOW
Prevention:
Focus ONLY on rightmost 3-5 data points
Explicitly write: "At the CURRENT rightmost edge, 8MA is at X% and is [rising/falling]"
Ignore what happened in September if we're analyzing November
Error 3: Missing Death Cross or Golden Cross Formation
Symptom: Report is bullish when 8MA and 200MA are about to death cross (bearish)
Prevention:
ALWAYS check: "Are 8MA and 200MA getting closer (converging) or further apart (diverging)?"
If converging with 8MA above 200MA → Potential death cross → BEARISH
If converging with 8MA below 200MA → Potential golden cross → BULLISH
Explicitly state: "8MA is currently [above/below] 200MA, and they are [converging/diverging]"
