Is the Broader market ready to play Catchup?  Not quite Yet.. Here’s Why

S&P and QQQ are now back to new all-time highs quickly as US Treasury yields have begun their descent.  This won’t prove to be a straight shot for either asset class in my view, as the broader market has not yet begun to participate, and some signs of negative momentum divergence remain present.  However, a stair-stepping rally makes sense for Equities as Treasuries seem to have shown their hand this week, and June seasonality in Election years remains positive.    Overall, a bullish stance remains correct, but with close eyes on other sectors starting to kick into gear in the weeks to come.  

Many are wondering what’s needed to help the broader market play Catch-up with the recent surge in Technology, as this week’s breakdown thus far hasn’t materially helped the Small-cap or Mid-cap sector, nor the Financials sector which has huge implications within SPX as the second largest sector.

Bloomberg and other news sources are claiming that the gap between Equal-weighted S&P 500 ($RSP) and cap-weighted S&P 500 ($SPX) might be due to converge given the bullish earnings outlook in sectors outside Technology.

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