The market kept climbing, making it hard to think it will drop.
On Friday the S&P 500 and Nasdaq both closed at new record levels.
Everyone wonders how long this rally will last. No one knows for sure. The best plan is to follow the data, stay with the trend, and watch what’s hidden underneath.
A simple tool for that is market breadth – the percentage of stocks that are trading above key moving averages.
On the Market Summary page, the Breadth panel gives a quick peek under the hood.
Click the Moving Average tab. You’ll see that small‑cap stocks are expanding more than the big‑cap indexes.
Take a look at the S&P 600 chart. It shows how many S&P 600 stocks are above their 20‑, 50‑, 100‑, and 200‑day averages. All four lines sit above the 50% mark, which is a bullish sign.
When you compare that to the S&P 500 and Nasdaq, the breadth there isn’t growing as strongly.
This is interesting because big‑cap semiconductor names like Sandisk, Micron, and Intel are dominating the news. The breadth data suggests we should also look at the small‑cap side.
A quick scan of MarketCarpets for the S&P 600 weekly performance shows many of the strongest movers are tech stocks, but they aren’t the famous Mag 7 names.
If the overall trend stays healthy, small‑cap tech could be a good area to explore for trade ideas.
Buying when the market is at record highs can feel uneasy. Options can help you set a clear, defined risk that matches your comfort level.
Next Tuesday, Tony Zhang, Chief Strategist at OptionsPlay, will host a free online event called “Why 85% of Options Traders Burn Out (And the 60‑Second Fix).”
The session will show how the OptionsPlay add‑on for StockCharts can help you spot solid trading setups.
No one knows exactly how high the market can climb, but with the right tools you can plan a trade, know your risk, and see the possible profit before you enter.
Save your spot now and enjoy the weekend!
Source: Materials provided by https://articles.stockcharts.com.Note: Content may be edited for style and length.