Behind the curtain

It’s interesting to watch Trump and Xi having good words for each other in public, but it would be more interesting to see the tone of their conversations in closed doors, where they tackle the world problems, their rivalry on AI, access to resources such as rare earth elements or geopolitics. In similar fashion, the S&P 500 keeps reaching new highs, and everything looks good, but in this case we do have some visibility behind the curtain. Please take a look at the charts below: the top one shows the latest 9 new all time highs for the index, and on 7 of those, the index showed negative breadth. This means there are more components on the index declining than advancing, into the index new highs. But the bottom chart is even more revealing: 9% of the index components are making new lows. This is the highest reading ever for new highs on the S&P 500. It’s like climbing a mountain with someone pulling from you. Another worry to think about on top of concentration and leverage. The resilience of this market is remarkable.

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