It’s easy to draw parallels between today’s market and that of the late 1990s. We’ve done it a few times ourselves along with just about every other market commentator. Sometimes these comparisons require a few hurdles to jump through to make their point. While these are useful, there’s nothing like an elegant connection between two points in market history. Along those lines, May 14th was first time the S&P 500 Index (SPX) hit a new closing all-time high with less than half of its constituents trading on point and figure buy signals. This was only the third occurrence (excluding clusters within 30 days) with data going back to 1997 and first time it happened since December 1999. The other time the SPX was able to hit an ATH with less than half its stocks trading on point and figure buy signals was June 1998. With such a limited data set, it’s difficult to have strong conviction about forward returns for the market but they are outlined in the image below. In June 1998, the market didn’t have a problem with such a narrow market at ATHs and went on to gain over 16% over the next year but fell almost 10% over the next three months. On the other hand, December 1999 marked the beginning of the end for the Dot.com Bubble. What can be said for certain is that market breadth has been historically weak for it to be able to hit an ATH.

 Looking back at the Bullish Percent for the S&P 500 (^BPSPX) from 1998-2001, both times SPX hit all-time highs with the indicator below 50% were when the indicator was in a column of Os. This is the same as the most recent occurrence. So, for all three occurrences market breadth was already declining as it headed into new ATHs. However, as we’ve talked about frequently over the last few years, the high level of market concentration has shown that the SPX can shake off poor breadth as long as those handful of mega-caps keep going. For better or for worse, the future of the market is dictated by a seemingly shrinking number of stocks.

What is a more productive market? One where everything is going up, or perhaps one that is being dragged higher by a select few names? While a reasonable market participant could make a defendable argument for either environment, the true answer is…. Both. Trend following will take us anywhere strength lies, whether that sits with a wide array of names or the one leader pushing markets forward at will. Most might agree that a more comfortable market is one where participation is broad and improving, but markets can go through ups & downs in all sorts of different investment landscapes. All that said though, it can oftentimes be helpful to understand where it might be more useful to go out and pick a select few stocks rather than simply throw a dart at a list of names. After all, the success of stock picking can vary widely from asset class to asset class, or even sector to sector. Imagine throwing a dart at a list of technology names at the start of 2026 and, by simply drawing the short stick, placing your client in a software name over a semiconductor name. While the “average” technology stock has still done comparatively quite well in 2026 on the recent rebound, the broader idea in play still shines through: Knowing how to attack each respective group can pay dividends over time. We will take today’s feature to break down this idea from a sector perspective.

Before moving further, we will start broader with commentary on the market as a whole. With action yesterday (5/19), (^PTSPX) reversed back down into a column of O’s on its default chart, signaling a decrease in S&P 500 stocks trading in an overall long-term positive trend. Now sitting at 56%, just over half of the broader S&P 500 trades in above their bullish support line. While this number is still in what the NDW analyst team would consider healthy positioning, there’s no question that long-term participation has waned. While the evidence still supports the idea that the majority of SPX returns occur when ^PTSPX is above 50%, the series of lower highs gives some support to the idea that market leadership is narrowing. The easy culprit here is semiconductors, which has done the bulk of heavy lifting to push markets to all-time highs while other areas of the markets have put in (comparatively) muted positive returns. The lesson learned from this chart: market participation is still healthy but is teetering on the boarder of being a bit too concentrated to defend without a bit of hesitation.

Broader market shifts out of the way, we can utilize both cap- and equal-weighted representatives from each sector to judge the differences in focus across each sector. The chart below includes the differences in fund score between the two options, aiming to give you a better understanding of which sectors are more focused (cap weight leadership) vs. diverse (equal weight leadership). A few major themes:

• Communication Services boasts the largest difference between cap and equal weight representatives.
• Utilities sees the largest spread favoring equal weight assets, seeing RSPU best XLU in terms of its fund score by .57 as of 5/20.
• For the most part, each sector finds both cap and equal weighted representation on the same side of NDW’s “technically acceptable” 3.0 score threshold, seeing all sectors but communication services agree in terms of their score range. Other “close” sectors include Consumer Staples (2.90 vs. 2.32), Financials (2.80 vs. 1.68) and Real Estate (2.90 vs. 2.75).

Knowing who wins the intra-sector battle can be where your analysis ends…. Or just begins. From there, the next logical step in a deeper analysis would be to question where each sector leader lies in relation to other sectors. After all, knowing that health care is dominated by equal weight representation is one thing, but knowing where RSPH sits in relation to various other sectors should guide your hand in knowing if having health care exposure even makes sense in today’s leadership landscape. To do so, the image below depicts a 3.25 matrix of all 22 sector options as well as broad S&P 500 representative SPY. Through this view, we will be able to effectively compare all the sectors against each other utilizing relative price movement to formulate rankings. Some major themes:

• Energy, technology and industrials are the only areas to beat out SPY. Keep this in mind.
• Healthcare, real estate, and consumer staples litter the bottom of the matrix. While there will be points of strength within each sector, the matrix suggests you can find better elsewhere.
• Towards the middle of the matrix, financials (XLF and RSPF) earn respectively low X counts, signaling a lack of near-term strength. Keep an eye on holdings here.

Take today’s commentary as a reminder that relative strength will always attempt to find a winner between assets. Whether you are looking at two stocks or two broad market representatives, it can often be quite useful to zoom out and include those names into a more diverse universe. In doing so, you can judge whether your “winning” asset is truly a winner or simply fool’s gold hiding in plain sight. 

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 5/19/26:

Portfolio View - Commodity Indices

Cryptocurrency Update

Cryptocurrency Video (2:27)

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool click here.

Call

Linde Plc (LIN) Sept 18 $500 Call

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Put

The Boeing Company (BA) August 21 $225 Put

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Income (Covered Call)

Cipher Digital (CIFR) July 17 $28 Covered Call

Additional Data: