The stock market has "bad breadth"
And Nvidia is not Atlas
I’ve tired of hearing market pundits wax poetic about how this is a “bull market” for stocks. I guess anyone can use any term without context and get away with it these days. But I think it deceives investors.
I’m not denying for a minute that the broad stock market indexes have done well since last October. But how soon people forget that this was really just a powerful surge to conclude a recovery from what happened during 2022. Calling this a bull market is like saying your team is championship caliber if they just won 10 out of 11 games…to get their record to .500.
The median stock in the S&P 500 is up around 5% a year since the start of 2022, and 6% a year since way back on February 19, 2020, the date the market topped as the pandemic rolled into town. So we’ve had a 33% drop, a recovery, a 25% drop, a recovery, and here we are. So be careful with market gurus who simply gloss over the details. Here’s the SPY (capitalization-weighted S&P 500) and RSP (equal weighted S&P 500) for the past 29 months. 15% and 6% total (not annualized). Bull market? Where?
The stock market, beyond the biggest companies, is getting narrower, not wider in what they call “breadth.” I look at several hundred charts a week, and while I’ve seen signs of things finally getting more inclusive to the upside, it just keeps failing.
Until that changes, Nvidia might go to the moon like the meme stock it has become, and hold up the market by itself like the mythical Atlas. But to paraphrase SoFi’s outstanding strategist Liz Young, “I’m all about the short-term Treasuries.” And picking my spots with that portfolio anchor secured.
IMPORTANT PROGRAMMING NOTE:
ROAR SCORE IS NOW PREMIUM-ONLY
Those who prefer to simply be observers from a distance find out once a week what my high-level thoughts are, and can ask questions of us any time.
But those who are willing to try premium for $40 for a month, or a free trial (1 week) offer we have, get more ROAR, more specific commentary, ETF research (that part is about to REALLY expand!) and a live, working portfolio and depth chart to use as a baseline however they see fit, and know that I have my own money in it.
