There’s a lot of winning going on in the stock market right now.
As of this morning, more stocks on the New York Stock Exchange (NYSE) are in uptrends than at any point since 2024.
That’s worth pausing on.
Just a few months ago, the dominant narrative was the exact opposite. We were told that hardly any stocks were going up. That the entire market was being held together by a tiny handful of names.
The Magnificent 7 economy. Has there ever been a time in which the market was as skewed towards one sector, and really one aspect of one sector, as it is today?
That was Florida Governor Ron DeSantis on October 29.
That date turned out to be important.
October 29 was the last time the Roundhill Magnificent 7 ETF (MAGS) made a new high. Since then, it’s done nothing but move lower, something we discussed just yesterday.
Funny how that works.
The stocks we were told were the only ones going up have been the only ones not going up.
Meanwhile, participation across the rest of the market has not-so-quietly expanded.
So let’s strip away the narratives and look at the evidence.
How many stocks are actually trending higher, where are they trading, and what does that tell us about the health of this rally?
Most Uptrends Since 2024
There are plenty of ways to define an uptrend. I prefer to keep it simple.
From an intermediate-term perspective, I look at one thing first. Where is the stock trading relative to its 200-day moving average?
If a stock is below its 200-day, it’s probably not in an uptrend.
If a stock is above its 200-day, it’s probably not in a downtrend.
Using that simple framework, the percentage of stocks on the NYSE in uptrends is approaching 70% this week:
That’s a lot of stocks not in downtrends.
That’s a lot of companies whose prices are moving higher.
And this is not just a U.S. story.
There are more than 2,000 stocks that trade on the NYSE, and many of them are headquartered outside the United States.
Think Taiwan Semiconductor (TSM), Alibaba (BABA), Toyota (TM), HSBC (HSBC), Novartis (NVS), SAP (SAP), Sony (SONY), Unilever (UL), Toronto-Dominion Bank (TD) and plenty of others.
At the same time, only three American mega-cap technology stocks trade on the NYSE: Oracle (ORCL), IBM (IBM), and Salesforce (CRM).
Compare that with the Nasdaq, which is home to many more mega-cap tech names like Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Broadcom (AVGO), Palantir (PLTR), Micron (MU), Advanced Micro Devices (AMD), Cisco (CSCO), and Intel (INTC).
These exchanges are built differently. One is not better than the other. They simply tell us different things.
The NYSE gives you far more exposure to cyclical sectors and far less exposure to American mega-cap technology.
On the NYSE, think financials, industrials, materials and health care.
On the Nasdaq, think tech, tech and then some more tech.
It’s a Broad-based Rally
At the same time that more NYSE stocks are in uptrends than at any point in the past year, the NYSE Advance-Decline line just pushed to new all-time highs.
That matters.
The NYSE Advance-Decline Line is one of the most important measures of market breadth. It tracks the cumulative difference between advancing and declining stocks on the exchange.
Each day, the net number of advancing stocks is added to the prior total. Over time, this tells us whether participation across the market is expanding or contracting.
Right now, participation is expanding to levels we’ve never seen before.
And, when you break the market down sector by sector, the message is the same.
Technology, financials, industrials, communications, consumer discretionary, consumer staples, real estate, utilities, health care, materials and energy are all trading above their 200-day moving averages.
All 11 sectors in the U.S. stock market are in uptrends.
It’s hard to call this weak breadth. It is hard to argue the market is deteriorating beneath the surface.
What we’re seeing is rotation.
New groups are waking up after being left for dead last year. Former leaders like the Magnificent 7 and the Nasdaq 100 haven’t made new highs since October.
That’s not a warning sign. That’s how bull markets work.
Nothing is broken. Nothing is failing. Leadership is simply changing.
And if you have ever wondered what healthy sector rotation looks like in real time, this is it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs