Chart of the Day - Tuesday, December 19, 2023

Today's Chart of the Day was shared by Jason Goepfert of SentimenTrader (@JasonGoepfert). Narrow leadership has been a hot topic all year, but it hasn't mattered, and it's no longer a valid concern. Many suggested that the rally couldn't continue because "it's just seven stocks propping up the market!" The magnificent seven did indeed mask some of the weakness beneath the surface, but isn't that the whole point of a cap-weighted index like the S&P 500?  Jason points out that the Equal-Weight S&P 500 just cycled from a 52-week low to a 52-week high in 33 trading days, marking its fastest rebound in 41 years. This has only happened one other time, so take it with a grain of salt, but it certainly wasn't bearish. The equal-weight index, or the 'average stock,' rose +46% the following year. The generals led the initial charge, and the troops have joined them on the battlefield now.