Market breadth is breaking out ahead of the S&P 500 according to a chart from the Weekly Bespoke Report, which is published on Friday afternoon.
Sentiment is back to being bullish, so if the pattern holds for 2019, there might be weakness in the S&P 500 for the near future since each time the S&P 500 has become “overbought” in 2019, – i.e. late April, Late July, mid-September, and the bullish sentiment metrics rose – the S&P 500 sold off sharply.
The FOMC announcement this week where another 25 bp rate cut is expected might be the charm since on July 31 and then again mid-September ’19, the SP 500 sold off to 2,830 level.
Seasonal factors might play a role too – we are shortly entering the strongest period of the year in terms of historical returns for the S&P 500, i.e. November – April.
Good breadth is better than bad breadth, and breadth is leading us higher once again.
Since the late January ’18 peak for the S&P 500 at 2,872 – 2,873, the S&P 500 is up 5.3% on a price basis.
![S&P 500 Chart S&P 500 Chart](https://d1-invdn-com.akamaized.net/content/pic60625e7faa55fca014848ae336af56e3.png)