I have a bullish chart to show you.
But before we dive in, a quick reminder: Callie Cox and I will be publishing a new 📈 Compound CHART PACK weekly on her blog for a limited time. We released a new chart pack this morning. Go subscribe to OptimstiCallie and check it out!
The recent price action in S&P 500 sectors is screaming that we are in the midst of a new, healthy bull market.
Cyclical sectors are leading and the non-cyclical/defensive sectors are lagging.
That is textbook price action coming off of S&P 500 lows (like the one we had in early April).
Can things change? Absolutely.
But right now, when I flip the charts on and look at what’s happening, I keep asking myself:
Could this price action be more bullish?
Let me show you what I’m talking about.
Below we’re looking at the change in each S&P 500 sector’s market cap weighting since the low on 4/8/2025.
I put the change into basis points which is why you don’t see percentages on the y-axes.
I then bundled the sectors into three groups: cyclicals, non-cyclicals, and defensives.
3/5 of the cyclical sectors have seen an increase in their market cap weight since the 4/8/2025 low:
Tech, Comm Services, and Discretionary.
Every other S&P 500 sector has seen a decrease.
It shows that the lion-share of market cap is going to the sectors that, in a new uptrend, should be leading off the lows. That’s a good thing.
And a caveat on Financials.
While the sector weight has fallen in absolute terms since the 4/8/2025 low, the sector price has continued to hit new cycle highs.
That’s important because, as JC Parets wrote about last week over at TrendLabs, “we don’t get a bull market without Financials.”
That’s all for today. Thank you as always for reading and please consider sharing this newsletter with a friend if you enjoyed!