Market Rally Could Be Expanding Beyond AI - but Here's the Catch

  • 📰 Investingcom
  • ⏱ Reading Time:
  • 38 sec. here
  • 5 min. at publisher
  • 📊 Quality Score:
  • News: 28%
  • Publisher: 53%

S&P 500 News

Microsoft Corporation,SPDR® S&P 500,NVIDIA Corporation

Stocks Analysis by Gary Tanashian covering: S&P 500, Microsoft Corporation, SPDR® S&P 500, NVIDIA Corporation. Read Gary Tanashian's latest article on Investing.com

A reader sent me an analysis calling for a “Monster reversion trade for the ages” based on the extreme under-performance of the Equal Weight SPX prior to the last two bear cycles. I have added the nominal view of RSP for context.

Market breadth readings indicate an undeniable truth: most stocks in the S&P 500 are vastly underperforming a handful of mega-cap behemoths. Well of course, it “can” keep going. This market with its crossed signals and failed has been a challenge. Like riding a bucking bronco or worse, a nasty and pissed-off bull. But the fact is that when coloring the above analysis with actual historical facts, the RSP/SPY ratio negatively diverged during phases where the nominal SPY, and RSP for that matter, were rising. Just like today.

. That seems to me to be an important qualifier. The big reversion trade in 2009 came after a pervasive market crash. The big reversion trade in 2020 also came after a market crash, of sorts.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 450. in NG

Nigeria Nigeria Latest News, Nigeria Nigeria Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

S&P 500 Earnings: Tech Sector Revisions Still Positive After Salesforce Last WeekStocks Analysis by Brian Gilmartin covering: S&P 500, Microsoft Corporation, FedEx Corporation, Oracle Corporation. Read Brian Gilmartin's latest article on Investing.com
Source: Investingcom - 🏆 450. / 53 Read more »