Chart of the Day - Wednesday, August 6, 2025

🏆 Today's Chart of the Day was shared by Ricardo Sarraf (@nullcharts).
 

• Concerns over market breadth are resurfacing, with Mega-Caps accounting for most of today's gain. However, Rick points out that the average stock is holding up just fine.
   
• The Value Line Geometric Index serves as a barometer for the median stock, offering a broader view of the U.S. stock market than traditional cap-weighted indices like the S&P 500. Similar to the Russell 2000, it hasn't made a new high since 2021. 
   
• However, it successfully restested a breakout level yesterday, turning former resistance into support. If the median stock were breaking down, concerns over narrow leadership would be more valid. But with the Value Line holding steady, there's nothing wrong with leaders leading.
   

The Takeaway: Breadth is narrowing, with Mega-Caps dominating today's tape. However, narrow leadership isn't a major issue if the median stock remains intact.