Summary
As we come to the end of another strong year for the stock market, a number of technical conditions are not nearly as strong as when we entered 2024. At the same time, other sentiment indicators are reflecting extreme optimism — just as they were a year ago. The market bottomed in October 2023 and had a great run in 2024 until July, when it was smacked for several months. After bottoming in August, stocks saw more clear sailing — albeit with some agita of late. At the start of 2024, 79% of stocks on the S&P 500 (SPX) were above their 200-day average; today, that reading is 58% and has been falling since the beginning of December (when it was 77%). For the S&P 100, an extremely high 84% of the index was over its 200-day at the start of the year; now, that has dropped to a mildly bullish 63% (from 79% at the end of November). For the most part, these breadth deteriorations have taken place since mid-October. For the Nasdaq 100 (NDX), a very strong 87% of the index holdings were over their 200-day at the start of the year; now, the reading is 58%. There were two periods of deterioration, and both coincided with rallies in the index. The Bullish Pe
