Hey, Ross here:
It must be pretty frustrating to be an “S&P 500 only” index investor right now.
Today’s charts show you why.
Chart of the Day
For the past 3 months, the S&P 500 has been struggling to definitively move past its late-October highs.
And yet, for the past 2.5 months, we’ve had a barely unbroken streak of Net New Highs.
This means that we have hundreds of stocks hitting new highs every day…
And yet the index has gone practically nowhere.
Like I said – it must be frustrating to be an “S&P 500 only” index investor right now…
Especially because two-thirds of S&P 500 stocks are currently outperforming the index.
This is just another symptom of the rotation that’s been happening.
Mega-cap tech is down – and it’s dragged the market-cap weighted index down with it.
Meanwhile, the “average” stock is doing fine.
And I’m not talking about just the large-cap stocks either.
Source: @GrantHawkridge via X
As the chart above shows, the large-cap, mid-cap, and small-cap indexes have all seen their Advance-Decline lines hit new 52-week highs.
This means there are far more stocks consistently rising than falling across every major segment of the market.
And yet…
The S&P 500 has barely made new highs…
While the Nasdaq is still below previous highs.
So below, let me explain a critical distinction most traders still fail to explain.
Insight of the Day
Don’t confuse the “stock market” with the “market of stocks”.
People look to the S&P 500 and the Nasdaq and equate it with the stock market.
But these cap-weighted indexes should NOT be confused with the “market of stocks”.
I know this just seems like clever wordplay. But it’s more than that.
Cap-weighted indexes are driven by a small group of mega-cap stocks.
When those names stall, the index can go nowhere – even while hundreds of other stocks are moving higher.
That’s the difference between watching an index – the so-called “stock market”…
And understanding the true market underneath it – the “market of stocks”.
Anyway, I wouldn’t want to be an “index only” investor right now.
Instead, I would want to keep targeting the strongest areas of this “market of stocks”.
And if you don’t know how to do that…
Then I’ve got great news for you.
Because as part of our President’s Day special…
You can get access to one full year of my LIVE weekly market breakdowns for just 99 cents.
I’ll show you LIVE the areas of strength I’m seeing…
And powerful setups most have no clue about.
This is a crazy deal – so we can’t keep it up for long.
So click here to grab it before it's gone.
Customer Story of the Day
I’m happy I recently opted in to the Ross Givens’s Trading Club at Traders Agency (at the best and fairest offer I could possibly get).
I’m new to trading U.S. stocks and options on a regular basis but it doesn’t matter, Ross does all of the hard work for me while I’m trading at my own pace (he knows how to trade successfully most of the time and I know that I won’t win every trade. Fair enough).
He and his great team share a lot of their trading experience in live sessions. Great job. Thanks a lot!
