Market Momentum Builds as Indices Approach All-Time Highs
The past week has seen a remarkable surge in market activity, with several key indices hovering near their early December peaks. This upward trend is backed by robust internal indicators, which often signal the start of a new intermediate-term uptrend.
Breadth Thrusts Across the Board
Tuesday’s market performance was particularly impressive, with the S&P 500 rising 0.9%, the Nasdaq and Nasdaq 100 gaining 0.6%, and the S&P MidCap 400 and S&P SmallCap 600 both surging 1.6%. This broad-based strength was evident across nine of 11 sectors, with Industrials leading the charge at 2%, followed closely by Real Estate at 1.9%.
Sector-Wide Gains
Healthcare and Utilities both rose 1.6%, while Materials added 1.3%. Communication Services and Information Technology also saw significant gains, up 0.9%, with Financial increasing 0.8% and Consumer Discretionary popping 0.7%. This widespread sector participation is a promising sign for the market’s overall health.
NYSE Advances Soar
The five-day average of NYSE advances minus declines has skyrocketed to 1,333, one of the highest readings since November 2023. This dramatic turnaround from the -1,300 mark on December 18 represents a significant breadth thrust. Similarly, the NYSE McClellan Oscillator has jumped to 77 from -124 in mid-December, another key indicator of market strength.
Historical Context
The last time we saw such a pronounced breadth thrust was between April and May of 2024, just as the market was gearing up for a strong move. With the current momentum building, investors would do well to take note of these encouraging signs.
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