We’re taking a quick break from the regularly scheduled programming of me pouring over a bunch of charts in WealthCharts to look at something a little different — the market’s breadth.
It refers to the relationship between stocks that are steadily rising versus those that are steadily declining.
In a truly healthy bull market, we want to see that it’s not only the big names — the ones with massive market caps or flashy earnings reports — that are climbing. We want to see strength spread across a wide range of stocks, not just a handful of giants pulling the averages higher.
The Reality on the Charts
If you’ve been watching my recent YouTube channel videos, you’ve seen it too — a lot of the charts are ugly.
Many are stuck in wide consolidation ranges or steady downtrends that have lasted weeks, even months.
What does that mean for us as traders?
Well, it depends on what you trade.
If you’re focused on the indexes — whether through futures like the E-Mini S&P 500, ETFs like SPY— remember that changes in market breadth take time to show up in the averages.
What Triggered This Shift in My Thinking
I’ll admit — I hadn’t paid much attention to breadth before.
But in the past few months, I couldn’t ignore the huge disparity between booming tech and AI stocks versus the many “regular” stocks just grinding lower.
Those smaller names don’t have big weight in the S&P 500, NASDAQ, or Dow.
Yet they’re the ones most traders can actually afford and trade every day.
That disparity made me realize: to sharpen my own analysis of the E-Mini S&P, I need to monitor the heavy hitters more closely.
For me, that means keeping an eye on roughly the top 25 stocks in the S&P 500.
If you trade the Dow, that might mean focusing on the top 5.
How to Track It Yourself
Here’s a quick workaround if you don’t have access to official weighting data behind paywalls like S&P Global.
Check out SlickCharts.com.
It’s a third-party site that lists index components and weightings — not guaranteed perfect, but it’s reliable enough for most traders.
For example, when I was writing my Skinny on the Mini research earlier this week, I saw the S&P 500 futures dip one morning because AMD had sold off after earnings.
Since AMD makes up about 0.65% of the S&P 500, I dug deeper — and saw the stock had fallen to key support overnight.
That made the E-Mini setup less threatening.
I projected we’d see a rebound session — and we did.
This isn’t an exact science, but it’s something I’m starting to incorporate regularly.
The Bigger Picture
Going forward, even beyond earnings season, I’ll share more updates on S&P 500 components — especially since that’s my main index.
And if I notice meaningful shifts in breadth or sector strength, I’ll bring that into future commentary as well.
Because here’s the bottom line:
It’s not about whether we’re in a bull market or a bear market. It’s about what you trade — and what kind of market that is in.
If you trade indexes, realize the averages might lag behind the action happening in their heaviest components.
If you trade individual stocks, there’s still plenty of opportunity out there — and it doesn’t have to come from the giant AI names.
So no alarm bells here.
Just a reminder to look at things from a different angle.
The AI bubble may still be expanding, and like the early days of the internet boom, it’ll take time to see how it all plays out.
I’ll be back soon with more analysis and updates.
Have a great weekend!
~Hima
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