Another stellar week for stocks which showed increasing evidence of a broader-based rally being closer to getting underway.  As many know from the past month, the SPX and QQQ rally to new highs has been driven by just a handful of names.  However, it appears like this could be changing and I suspect that next week provides the time where Equal-weighted S&P 500 gauges could bottom out vs. SPY.  At present, this divergence isn’t too problematic given no evidence of leading stocks turning down, and SPX and QQQ maintaining recent uptrends.  Equal-weighted SPX managed to close today at the highest levels in nearly two years, and arguably should help jumpstart a broader rally while many are fearing markets have become too overbought.   

Have stocks truly gotten overbought?   Most momentum gauges would refute that notion, particularly when considering that Equal-weighted S&P 500 has largely gone nowhere since mid-December up until this past week.

Thankfully for market bulls, this gradually looks to be changing.  As shown below, Equal-weighted SPX just closed the week at the highest levels since Spring of 2022 after having churned for largely the last seven weeks.  This joins the Russell 3k along with MSCI World index in ...

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