📈 Broad Based Buying

This comparison is staggering.

Broad Based Buying

The stock market has seen some of the most broad-based buying than we have seen in a long time.

How do you know that?

I love to compare the SPY to RSP to understand this.

SPY is the S&P 500. 38% of it is composed of 7 stocks (the Magnificent 7) which are tech-focused.

RSP takes all of the names in the S&P 500 and assigns equal weight to them.

Here is the SPY:

Here is the RSP:

Note how the SPY has not yet broken to all-time highs while the RSP has.

What does this tell you? The stocks that are overweight in the S&P 500 are lagging the market.

In other words, Magnificent 7 tech names are underperforming vs. other names in the S&P 500.

With this in mind, you must adjust your trading strategy to reflect this insight.

My recommendation would be to focus on sectors such as: KRE XBI XLRE XLF.

This is where you are seeing strength.

For more details on what this means for the market, watch this video: