Market Momentum Builds as Indices Near All-Time Highs
The past week has seen a remarkable surge in the market, with several indices hovering close to their early December peaks. This upward trend is characterized by exceptional breadth, with various internal metrics exhibiting significant thrusts. Historically, such broad-based price action has marked the beginning of a new intermediate-term uptrend.
Sector-Wide Gains
Tuesday’s trading session saw the S&P 500 (SPX) rise by 0.9%, while the Nasdaq and Nasdaq 100 gained 0.6%. The S&P MidCap 400 and S&P SmallCap 600 led the charge, surging 1.6%. This widespread strength resulted in nine out of 11 sectors posting gains, ranging from 0.7% to 2%.
Industrials Take the Lead
Industrials emerged as the top-performing sector, with a 2% increase. Real Estate followed closely, rising 1.9%. Healthcare and Utilities also posted notable gains, up 1.6%. Materials, Communication Services, and Information Technology all added between 0.9% and 1.3%. Financials and Consumer Discretionary rounded out the list, with increases of 0.8% and 0.7%, respectively.
Breadth Indicators Signal Strength
The five-day average of NYSE advances minus declines soared to 1,333 on Tuesday, one of the highest readings since November 2023. This represents a significant breadth thrust, particularly when compared to the -1,300 reading on December 18. The NYSE McClellan Oscillator, a key breadth indicator, has also jumped to 77 from -124 in mid-December, signaling a thrust. The last time this occurred was in November 2023, preceding a strong market move.
A New Uptrend on the Horizon?
With the market exhibiting such broad-based strength, it’s possible that a new intermediate-term uptrend is emerging. As investors, it’s essential to stay informed and adapt to changing market conditions. By staying ahead of the curve, you can make informed decisions to optimize your portfolio’s performance.
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