TGIF - Here’s an excerpt from today’s Opening Look piece.
I also wanted to share this LinkedIn post, which I also shared on X and here on Substack Notes yesterday.
A new client recently asked me, “What was the biggest shift in your process over your career?” 👉 My response.
New 52-week Highs are Expanding
54 stocks within the S&P 500 made new 52-week highs. Ten of the eleven sectors had at least one stock register a new high, with Utilities the lone exception. The vast majority came from Financials, which accounted for 20 names. This has been one of the key reasons this sector has been a core focus of ours the last few months, when we began highlighting a growing number of trade ideas from that area.
We haven’t seen many days with 50 or more new highs recently—there have been only four such occurrences all year. The most recent instance was just a few weeks ago, and we discussed how different this advance has looked from a breadth perspective.
New highs are often a lagging indicator, and when markets rebound sharply from a correction, leadership typically comes from higher-beta areas. That usually means large-cap Growth leads, helping the major indices recover and push to new highs… while other areas lag.
That dynamic has largely defined this year so far. However, with the latest comeback producing breakouts to new all-time highs outside of Growth, there’s a growing chance this new-highs count expands meaningfully.
In fact, there were another 42 stocks that closed within 3% of their respective all-time highs yesterday, putting us near 100 stocks either at or very close to new highs.
As the chart shows going back to 2023, routinely reaching that 100-stock threshold has been a key confirmation of a healthy and sustainable uptrend, with participation expanding alongside the index. For this next leg of the strong rebound off the April lows, seeing the 52-week high list broaden materially will be a critical component of confirmation.
Live Patterns – 7,020 target remains alive
The comeback kept the bullish pattern in play, with the 7,020-target remaining alive.
Potential Patterns – The big bullish set up still in play
As is clear, the potential bullish pattern we’ve been tracking continues to be traced out as well as we could expect at this stage. The index crept even closer to its October 27 high after yesterday.
The new pattern is close to triggering
The newest bullish pattern we profiled yesterday morning was not officially triggered, but the late-day comeback put the S&P right at the slightly upward-sloping neckline.
