I've been getting this question quite a bit lately: Does Breadth even matter?
And the answer is yes. It's a market of stocks.
Go back and study all the bull markets in history. You'll notice how as the bull market progresses, you get more and more stocks participating to the upside. You tend to see sector rotation and new leaders emerging. You also see expansion in participation across countries around the globe.
This is what is currently happening. It's all of the above.
In Bear markets, however, these things do not happen. It's actually the opposite. You see fewer and fewer stocks going up, while more and more stocks are breaking to new lows. The sector rotation turns into the last leaders catching down to the losers. And you see stock market indexes in countries all over the world falling in price, not rising.
When you weigh all the evidence, it's quite obvious that we are currently in the first category, and certainly not in the second one.
How can market breadth be deteriorating, when participation just keeps expanding?
How can you tell me with a straight face that breadth is weakening, when the broadest measure of European equities just closed the week at its highest level in its entire history for 3 consecutive weeks, and now working on a 4th.
The Euro STOXX 600 Index includes the small-caps, mid-caps and large-caps in Europe. It's representative of 17 different countries, which accounts for over 90% of the entire market-cap of the continent.
And line go up.
When you look underneath the surface of what's happening around the world, you can see more and more countries making new highs.
Here's Poland, for example, completing this base and now making new all-time highs:
You're seeing continued leadership from Israel, which outperformed the United States last year.
Here are new all-time highs again for the Tel Aviv Stock Exchange Index:
And back home in America, what do you see?
Here's the Nasdaq Composite Index consolidating below its first target from that multi-year base that completed a year ago.
Are you going to bet that this consolidation is NOT going to resolve in the direction of the underlying trend?
To me, this looks like a healthy uptrend that is ready to break out any day now:
But let's be serious.
As well as U.S. stocks are doing, and as this breadth expansion dominates equities all over the globe, it's China that is the big winner so far this year.
Remember when a Trump victory was supposed to be the end of Chinese equities? Remember when something they're calling "Tariffs" were supposed to send Chinese stocks crashing lower?
I do.
But it's been the exact opposite, just as we expected.
Look at the performance of Chinese stocks, just since the infamous "Tariff" announcements at the end of January. Chinese Tech is up almost 10% with the Chinese Internet Index up over 7%.
All the Chinese Indexes are outperforming the American ones. This is the opposite of what the news media told you would happen:
In 2024, Chinese stocks outperformed the United States.
In 2025, Chinese stocks are outperforming the United States.
This is the new trend, that's not even new any more. Yet, most people are either ignoring it or completely unaware.
We love that.
Yesterday, we published a video with Steve Strazza breaking down one of the most misunderstood trades in the market right now.
While everyone else is looking the other way, 7 out of the 8 China trades put on since the Election have at least doubled in value.
Yes, you read that right. 7 out of the 8 China trades put on over the past 3 months HAVE DOUBLED IN VALUE, at least. And a bunch have returned way more than that.
