🔄 The Stock Market is Rotating

Here's where you should focus.

The stock market has been on a tear since the Fed announced that rate cuts are likely to be coming soon.

While some sectors have outperformed others, we’ve seen broad-based buying across the market.

From the chart above, we can see that the percentage of S&P 1500 stocks registering a 63-day high is at its highest level since 1982.

The good news is that when the number of stocks registering a 63-day high reaches levels like these, the S&P 500 has been higher 12 months later in all but one case.

Below is the data to support this conclusion. Note that we do not have enough data points for statistical significance, though this trend is still worth understanding.

On average we are 12.4% higher, and we have had a positive S&P 500 performance 94% of the time.

The last thing to be aware of is that there may be an opportunity for outsized returns in the Russell 2000 (small caps). In instances such as these, the Russell 2000 has outperformed the S&P 500 by a fairly significant amount in almost all cases.

Therefore, as you are looking for stocks to target and sectors to keep an eye on, be sure to look out for the IWM and small caps.

For more information, watch the 5 minute clip below: