Mark Twain famously said there are three kinds of lies: “Lies, damned lies, and statistics.”
It was his way of exposing how easily numbers can be twisted to prop up a weak argument.
We see the same thing every day in today’s markets.
People take a ratio of new highs to new lows and call it “breadth.”
They grab the percentage of stocks below some arbitrary moving average and declare “weak participation.”
They invent an oscillator, slap someone’s last name on it, and suddenly it’s a “warning signal.”
None of that replaces the only thing that actually tells you the truth: going in and looking for yourself.
But humans love shortcuts. They’ll do anything to avoid the work.
Instead of just spending an hour flipping through all the charts, they’ll waste an entire career attempting to build tools to avoid flipping through those charts.
It’s a remarkable trait — one we happily exploit.
Because at TrendLabs, we have an unfair advantage: We actually do the work. We go through the charts. We look for ourselves.
Nobody else wants to.
Good.
Lots of Stocks Are Going Up!
If market breadth is supposedly “so weak” and “nothing is going up,” then riddle me this:
How did the equally weighted S&P 500 just finish the month at its highest level in history?
A miracle?
Or — hear me out — maybe it’s just math.
Those of us who actually count have been saying the same thing for months: This isn’t deterioration; it’s sector rotation.
Nearly two-thirds of NYSE stocks are in uptrends. Strip out all the so-called “Magnificent 7” from the S&P 500, and guess what?
The rest of the index is still making new all-time highs.
Go look for yourself. Remove Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) from the equation.
The market is still ripping:
But they’ll keep lying to you with “statistics,” insisting those seven stocks are the only ones going up.
Anyone willing to spend five minutes actually looking at charts would see how absurd that is.
The chart above shows the truth:
It is mathematically impossible for the equally weighted S&P 500 to hit new all-time highs if only seven stocks were going up.
Turns out a lot more are.
Don’t Fight Papa Dow
The way I learned it, you never fight Papa Dow.
The Dow Jones Industrial Average is still the world’s most important stock market index, and it just closed the week and the month at fresh all-time highs.
And it’s not just the price-weighted version.
As you can see in the chart, the equally weighted Dow also just finished the week and the month at its highest levels in history:
So why does this matter?
Because this is what dictates our behavior as traders and investors.
Every day, every week, we’re trying to answer the same simple question:
Should we be spending our time looking for stocks to buy, or should we be spending our time looking for stocks to sell?
The weakest minds fall for whatever lazy narrative is trending. Right now it’s AI, 24/7.
They can’t let it go. They won’t do the work. And because of that, they’re blind to everything else that’s working — which, by the way, has nothing to do with AI.
The lesson?
Don’t be a simp.
Look past the narrative. Look past the noise. Go look for yourself.
You’ll find more opportunities than the lazy crowd even knows exists — and that’s where the real money is made.
This Week in Everybody’s Wrong
On Monday, we opened Thanksgiving Week by expressing our gratitude to the short sellers.
The ability to profit from falling stock prices is one of the many features that makes U.S. markets great.
And the more short sellers there are, the better it is for us.
On Tuesday, we talked about traditional brokerage firms opening the door to sports-betting markets for their clients.
Plenty of people want you to believe sports gambling and trading public securities are the same thing.
Nope; sports gambling is not investing.
On Wednesday, we did the math.
More stocks are going up, not fewer, and Transports are confirming Industrials.
If Charlie Dow were here today, he’d be the first to tell you it’s a bull market.
On Thursday, we discussed our environment and why it matters.
Weighing the evidence and stacking the probabilities is the best way to put ourselves in position to win.
If your system can’t adapt, you’re going to fail.
On Friday, we celebrated a new set of fresh monthly candlesticks.
Nothing in my entire process is more valuable than reviewing monthly candlesticks.
On Saturday, Quantitative Analyst Grant Hawkridge shared another example of what it means to always be improving.
We couldn’t do what we do around here without Grant.
And it all begins with curiosity.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs