Strong breadth in tech, healthcare, and communication services
As Bespoke noted, the % of information technology, communication services, and health care stocks above their 50 dma is extremely high (93%, 96%, 97%).
The following chart illustrates that 93% of S&P 500 information technology stocks are above their 50 dma:
When this happened in the past, the S&P 500 information technology sector's returns over the next 3 months were slightly more bearish than random:
As were the S&P 500's forward returns:
96% of S&P 500 communication services stocks are above their 50 dma:
97% of S&P 500 health care stocks are above their 50 dma:
Combined, an average of 95% of stocks across these 3 sectors are above their 50 day moving averages. This is one of the highest level in years, and the last time this happened was in January 2018 just before stocks tanked:
Similar historical cases mostly led to short term pullbacks, even though most of the 1 year forward cases were bullish:
