Are You Sick of the Mag 7 Yet?
If you're waiting for the other 493 to rally, you'll have to wait until the Mag 7 dips.
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I know by now you are so used to (or are you sick of??!) the Mag 7 vs the 493. I know this because I know I am.
I spent the better part of last week talking about the potential for an oversold rally this week. And sure, Monday saw the rally, but it’s hard to like a rally that sees the S&P tack on over one hundred points, and the statistics behind it are so uninspiring.
I’ll begin with breadth. Friday, you may recall the S&P was down about 80 points until the afternoon, when it had a late-day rally. Even when the S&P was down over one percent, breadth was barely red. You might recall I highlighted earlier in the week that there was very little selling outside of the index movers.
The end result is on Friday, the S&P tacked on eight points with net breadth at +600. Monday, the market was up all day, and the S&P tacked on over one hundred points with net breadth at +980. Basically, if you did well last week, you languished on Monday’s big rally.
Friday saw the NYSE with up volume at 69%. Not bad for a day, the S&P is up a mere 8 points, right? Monday's up volume was 62%. That is not a typo. There was just better breadth on Friday, even when the S&P was solidly red.
Ahh, but surely Nasdaq was better because that’s where all the action is, right? Friday saw Nasdaq close red by about 50 points. Up volume was 59%. Not bad. Monday’s whopping 520-point rally netted us 62% of the volume on the upside.
I read recently that the market cap of NVIDIA is now larger than all of the Mid Cap 400 and—yes, and—the Small Cap 600. And that is exactly why we have an Either/Or Market. When NVDA goes down, it leaves room for the others to rally. When it rallies, it leaves very little room for the others to rally.
Remember how just yesterday I highlighted the Transports and the Utes? Both having had a good week last week? Both of those indexes were red on the day Monday. It wasn’t just ‘not up a lot’, they were both red, after having been green on the open.
Heck, folks didn’t even buy their speculative faves in the quantum space. But let’s take a look at the chart of Visa. There is clearly a buyer who has stepped in at 335 every time it has come down here since last summer. I realize no one cares about this stock anymore. But it couldn’t even stay green on Monday.
I truly thought we’d get an everything rally this week and not such a narrow one. There is still time for the others to rally, but if we get more of what we saw on Monday, I don’t think it is going to get anyone excited, let alone giddy.
