One of the many amazing things about public markets is that price is the final arbiter of truth.
They come to you with a credit crisis that will be here any day now. The fairy tales about recessions won't stop. The president will ruin everything. And a war in the middle east is something they pretend is only happening now, and isn't always happening...
Yet the line keeps going up.
The Dow Jones Industrial Average, S&P500 (equally-weighted), New York Stock Exchange Composite and many other measures of U.S. equities are hitting new all-time highs.
More importantly, the list of stocks going up in price keeps getting longer, not shorter.
The number of sectors and industry groups participating to the upside continues to increase, not decrease.
More countries around the world are going up in price, not fewer.
The lines are up and to the right fam.
And this chart below just might be the best way I've seen to measure that yes, in fact, the lines are going up.
What we're doing here is looking at the % of stocks in the S&P500 that are above important prior highs from the past several cycles.
More specifically, we're measuring the % of stocks above their 2018 highs. We're counting how many are above their 2021 highs.
And we're even looking at the short-term breadth expansion, focused on the % of stocks above their December '23 highs as well as the Q1 '24 highs:
As you can see, all of these measures are at, or near, the highest they've ever been.
These lines are NOT going down.... which would be evidence of breadth deterioration.
They are all heading towards the upper right corner of the chart, which mathematically indicates to us, that what we keep seeing is breadth expansion.
It's impossible for things to get worse if things are just getting better.
I have a funny feeling that when things actually do start to deteriorate, I will be told how wrong I am and that things are actually getting better.
But fortunately I'll have the math, and I'll actually take the time to count.
We'll bring it back to this chart right here.
Keep this one handy.
JC
Nvidia $NVDA? That's an old story. The big move – and the big money – has been made.
But we couldn’t care less. It’s still a bull market. What we need to do now is find the next NVDA.
And we have a plan to do it.
