Equally-weighted S&P500 Falls Apart Relative

But just because the larger market-cap stocks are outperforming your "average" stock doesn't mean it's not a bull market.

When you look back at history, it just means that larger-cap stocks are getting inflows faster than others down the cap scale.

That's all.

A good example of this was seen in 2017. Remember how angry they all were after Trump was elected. "Go to cash", they said.

Well, as soon as Trump was elected President the stock market went on to have one of its greatest and least volatile years in American history.

The Equally-weighted Index underperformed that whole time...

And to be clear, 2017 wasn't a record year 'because' of Donald Trump.

That was just the catalyst at the time to skew market sentiment way too negative.

The "recession" that never seems to come, and the bank "crisis" that the journalists keep telling me about appear to be this cycle's version of Trump.

The bottom line is this: It's not about whether the Equally-weighted version of the S&P500 is outperforming or if it's the Cap-weighted version leading.

It's still about the Dollar.

A weaker Dollar is consistent with higher stock prices. A stronger Dollar will likely put pressure on stocks.

Here's the U.S. Dollar Index with the Short S&P500 ETF overlaid below it.

Notice how they look exactly the same:

When Dollars are falling, so is the Short S&P500 ETF. In other words, a weaker Dollar leads to higher stock prices, and vice versa.

The direction of interest rates is determining which types of stocks will outperform.

The direction of the Dollar determines whether stocks will go up or not.

That's how I see. Because I'm data driven.

Your narratives are boring.

We stick to reality around here.

And this Monday night we'll be going over all of it - all the charts, all the sectors and all the stocks we want to own right here.

We'll have a fresh batch of Monthly Candlesticks and Quarterly Data to rip through together.

We'll get going @ 6PM ET Monday April 3, 2023.

Premium Members can register for that here.

See you there!

JC