Does Breadth Deterioration Matter? Not Yet, with NVDA Pushing to New All-Time Highs

Near-term US Equity trends remain positive, and NVDA's breakout to new all-time highs serves as the technical green light for SPX to push up toward 7200 before any consolidation gets underway into May.  While the percentage of stocks above their 50 and 200-day moving averages has begun to fade modestly from recent peaks — a development worth keeping an eye on — this does not rise to the level of a technical warning at present, and the breadth deterioration remains narrow in scope rather than broad-based.  Meanwhile, recent pullbacks in the DJ Transportation Average and Consumer Discretionary look temporary and buyable in my view, as neither has violated its uptrend from the March lows, and Defensive sectors are continuing to show lagging tendencies. The overweight stance in Financials, Technology, and Industrials remains appropriate, and it's right to lean bullish and use any dips as an opportunity to add exposure. NVDA's new all-time high is certainly a positive for US risk assets given NVDA’s representation within SPX.  Finally, given the timeline of the end of the week for possible convergence of DeMark-related exhaustion, month-end pension rebalancing along with a huge percentage of SPX market capitalization reporting earnings, it’s likely that Thursday/Friday looks more important as an area for stalling out vs early in the week.

Invesco S&P 500 Equal Weight ETF ($RSP) - Minor stallout doesn’t pose too much concern with Tech still doing the “heavy lifting.”

As discussed in last week's notes, the price in the Equal-weighted $SPX has certainly been lagging the cap-weighted $SPX over the last two weeks.  The equal-weighted S&P 500 ETF by Invesco ($RSP) has now fallen for five consecutive days as WTI Crude attempted a mild bounce from 4/17.

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