How to Play the Narrow Bull Market

Hey, it’s Ross Givens here with the Chart of the Day. Even as the Nasdaq hits new highs, nearly half of the stocks trade below their 200-day moving averages. The number of advancing stocks versus declining ones is also weakening. This classic divergence means the market climbs higher with less participation. That’s why the S&P 500 and Nasdaq are at all-time highs while the Russell 2000 lags. This isn’t a bearish signal, but it does mean market strength comes from a select group of stocks. And that has obvious implications on our trading strategy.

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