Part 6/7:
As we analyze market health, key metrics such as the percentage of stocks above their respective moving averages are worth considering. Current data indicates weaker participation among stocks in the upward trajectory of the S&P 500, suggesting that the rally is not as broad-based as one might believe. This divergence can be a precursor to potential corrections.
Moreover, previous years have shown that the market can continue ascending even when foundational metrics exhibit weakening breadth and volatility indicators remain elevated. As we navigate through these conditions, it is essential to exercise caution and monitor any shifts in market dynamics closely.