Hey, Ross here:
And as we close out a great trading week, let’s look at a chart that dispels the notion that the market is now overbought.
Chart of the Day
What you see above is the equal-weighted S&P 500 ETF, which is the S&P 500 if every stock is treated as if they have the same market cap.
This means none of the megacap stocks that have been leading the market have any more influence than the rest.
And as you can see, the equal-weighted S&P 500 index – while having rallied together with the regular S&P 500 – is still below its 2023 highs.
Meanwhile, the regular S&P 500, led by these megacap stocks, has surged to 52-week highs.
What does this difference between the equal-weighted and regular S&P 500 tell us?
Read the Insight of the Day to find out.
Insight of the Day
There’s still plenty of opportunity in smaller stocks
Since the equal-weighted S&P 500 hasn’t rallied as strongly as the regular S&P 500, this means the smaller stocks that make up the index could still have a ways to go.
Sure, you might not want to buy into the megacaps now – those might indeed be overbought.
But there are plenty of lesser-known names – names you won’t read about in the headlines – that are just only picking up steam.
Those are the opportunities I’m targeting…
Enjoy the long weekend.
Embrace the surge,
Editor, Stock Surge Daily