  merck and caterpillar report before the open apple and amazon report after the close   advancers  decliners appear to be stuck in a holding pattern equity futures are slightly higher ahead of the open despite yesterday’s selloff into the close investors are sifting through another swarm of earnings but the big headliners will come after the close today when apple aapl and amazon amzn report investors will be looking to see if apple can deliver phones for christmas in light of the chip shortage and amazon’s cloud business could be in focus as the “work from home” cloud business was good for alphabet googl but disappointing for ibm ibm the dow jones industrial average dji is pointing higher ahead of the open with components merck and caterpillar announcing positive earnings drug company merck mrk reported betterthanexpected revenue and earnings prompting it to rally 185 before the opening bell the company also raised it’s fullyear outlook for earnings as success of its new cancer drug continues to help the company grow caterpillar cat is also higher in premarket trading after beating earnings estimates despite missing on revenue the company appears to be able to navigate higher costs because of the higher number of orders however the company is cautious and stressed that there could be trouble in meeting the orders despite the caution cat financial reported 110 increase in the division’s earnings because lending remains solid comcast cmcsa beat earnings as well thanks to growth in broadband and recovery in its universal studios theme parks the stock was up 36 in premarket trading on the negative side ecommerce firm shopify shop is down 36 before the open in response to missing on earnings and revenue the company reported issues with the global supply chain but also lower ecommerce growth this could be a sign that consumers are changing their focus from online shopping to other avenues also royal dutch shell rdsa is down 4 in premarket trading after the oil company missed on earnings the company cited costs related to damages from hurricane ida in the us as a reason for the miss the company is also setting tougher emissions targets for itself which could add to its growing costs crude oil cl is falling a little as iran rejoins the nuclear talks lower prices could provide some relief for transports particularly airlines where fuel is such a large expense after a choppy day of trading on wednesday stocks sold off into the close it was supposed be a big week for big tech but so far it’s been a mixed bag while ebay ebay isn’t as big as some of the other tech firms it still has some pull however the stock was down more than 4 after the bell despite betterthanexpected revenue and earnings unfortunately the lower forward earnings guidance failed to impress bidders after the close ford f announced earnings that looked somewhat similar to general motors gm that were released in the morning that were betterthanexpect but lowerthanexpected revenue gm fell 542 on the day but oddly ford was up more than 9 in before the open the difference appears to be that ford increased its 2021 earnings guidance and reinstated its dividend overall car makers have had a decent year despite the shortage in vehicles the shortage has also helped in selling car parts as more people choose to fix what they have o’reilly automotive orly announced after wednesday’s close and beat on top and bottomline estimates despite the positive news investors didn’t appear to be too excited about what’s under the hood because the stock was only slightly higher in afterhours trading the sp 500 spx is trying to follow through on its new highs but there appears to be a lack of breadth behind to push it along breadth refers to the number of stocks that rise and fall at the same time a broad market rally is one where the majority of stocks rise conversely a broad market selloff is one where the majority of stocks fall there are several ways to measure market breadth—one popular way is the ad line the ad or advancedecline line indicator measures the number of stocks trading on the new york stock exchange that are rising or advancing against the number of stocks that are falling or declining on a given day if the ad line is going up then the majority of stocks are advancing if it’s going down then the majority of stocks are declining many investors look for divergences in the sp 500 and the ad line to help determine the strength of a bull or bear market the graph below shows that the ad line has moved sideways since june which suggest that there is hesitancy and uncertainty in the overall stock market when the ad line goes sideways or down as the sp 500 goes up this is a divergence the lack of market breadth can weigh down the performance of the stock market on the bright side the ad line was able to eke out a new high with the sp 500 but it’s also currently pulling back with the index too soldiers  generals another way that investors measure breadth is by comparing stocks of different sizes the sp 500 is made up of large and megacap stocks these are the biggest companies in the united states and in some cases the world the russell 2000 rut is a smallcap index which means it tracks 2000 of the smallest publicly traded companies if both indices are moving up there’s wide breadth in the market some investors refer to the sp 500 as the generals and the russell 2000 as the soldiers if the soldiers aren’t following the generals then the stock market will likely keep advancing however the russell 2000 has oscillated sideways since march while the sp 500 has moved mostly up investors who follow this strategy would say that in order for the bull market to continue many of the soldiers need to start falling in line highs  lows breadth can also be measured by the number of stocks that are creating new highs and new lows stocks that are creating new highs are bullish therefore stocks creating lows are bearish nyse new highs 6m nyhi6m tracks the number of stocks that are creating new sixmonth highs and the nyse new lows 6m nylo6m tracks the number of stocks that are creating new sixmonth lows through most of the year new highs have outnumbered new lows by a large margin however in july the number of stocks that were creating new highs decreased dramatically while the number of stocks creating new lows has been increasing this seems to reflect what we’ve seen with the russell 2000 and the ad line—market breadth has weakened pushing the panic button so is it time to push the panic button not necessarily in my recent november outlook article and several times here in the market update i’ve pointed out that the market and the economy are dealing with a lot of issues right now including the possibility of fed tapering inflation supply chain issues and worker shortages that’s a lot to digest and while there may not be broad buying but there’s also not broad selling therefore it appears many investors are in a waitandsee mode there’s nothing wrong with that mode as along as investors can be patient