You know how I can tell this time is different?
Because it’s always different.
Every cycle has its own fingerprints, its own quirks, its own psychology. And today we’re talking specifically about why this one isn’t like the dot-com bubble.
Earlier this week we walked through the idea that maybe – just maybe – we’re in Year 1 of a new bull market, not Year 3 or Year 4.
A lot of people laughed at that.
So I guess we’ll find out who’s actually paying attention.
This Is Not 1999
Nobody’s partying like it’s 1999 – and if you actually remember that period, you know exactly what I mean.
This isn’t remotely the same setup. And it’s not just the lifestyle difference. We have hard data showing that 2025 looks nothing like the late-’90s blow-off.
When we talk about market breadth and this being a “market of stocks,” the point isn’t that a handful of leaders mean everything else is collapsing. It just means a lot of stocks are going up – just not as fast as the standouts.
The Chart of the Week comes from Jurrien Timmer, Director of Global Macro at Fidelity. He compares the percentage of S&P 500 stocks above their 200-day moving average today vs what it looked like during 1999-2000:
Here’s the key line from Jurrien:
Incredibly, in 1999 the (S&P500) index gained more than 20%, while only 20% of stocks were above their moving average. That’s not an easy thing to pull off and it shows just how top heavy the index was back then. Fast forward and we see that today 60% of stocks are above their moving average.
Back then, the S&P 500 kept ripping to new highs while roughly 80% of stocks were in downtrends. Today, that’s not even close to the case. More than half the S&P 500 is in an uptrend right now – and that number was north of 70% just a few months ago.
Jurrien nails it: “The leadership gap today is more relative than absolute, whereas in 1999 it was both.”
Translation: Yes, a few stocks are crushing it. But the rest aren’t collapsing – they’re just rising at a slower pace.
That’s not weak market breadth. That’s just sour grapes.
The U.S. Is Not That Top Heavy
And while we’re on the subject of things that get people worked up in this market, it’s not just the “weak breadth” conspiracy theorists who haven’t even bothered to count.
We’ve also got the Concentration Protestors – the folks convinced that the top 10 stocks representing nearly 40% of the S&P 500 is some sort of existential crisis.
This group loses its mind over that number. They swear the system is broken. They insist something is wrong.
We’ve already covered why this fear is entirely in their heads. (See Concentrate Harder.)
But last night, our friend Ryan Detrick, Chief Market Strategist at Carson Group, dropped an absolute gem of a chart that perfectly illustrates the point – and I had to include it, because clearly people are still missing it.
Take a look. When you zoom out globally, the U.S. actually has one of the least concentrated stock markets among the 25 largest countries in the world:
Only Japan and India have less top-heavy markets. Everyone else? Way more concentrated than we are.
So not only is the U.S. not the outlier people are trying to scare you with… if anything, we probably need more concentration just to catch up to the rest of the world.
Myths busted:
- No, this isn’t 1999. The data is right in front of us.
- And no, the U.S. doesn’t have a concentration problem. Not even close.
We have the numbers. You can see them too. It’s just math.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs