Last week I wrote about how just four stocks contributed over 100% of the weekly gain in the S&P 500 and only two account for 60% of the gain (AMZN and MSFT). Breadth was beginning to narrow and the VIX was beginning to compress. This week we had a minor dip in large caps with mid and small caps off by just over -3%. The breadth category of the Maestro Model has gone negative, but the model as a whole remains positive. This week’s Spotlight chart looks at a very interesting breadth chart, with a new record being set by the stocks in the S&P 500.
All eyes this week will be on the FOMC announcement with the market expecting another (and maybe final?) rate cut. Based on flows out of TLT, traders have been trying to front run the cut as quite a bit of money has been pulled from the Treasury ETF. All the major banks and strategists are putting out their 2025 S&P 500 price targets. Long time readers will know this is not a game I play. Most market observers will recognize that these numbers get “adjusted” throughout the year based on the price movement of the Index, they are basically closet trend followers. It’s simply a guessing game that ignores the notion that quite a bit can occur between January 1st and December 31st each year by the time the market gets to that “target”. Alas, I set no targets and approach the market each week based on the current data it provides.
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