The S&P 500's resilience amid a streak of negative breadth has caught the attention of market analysts, who are concerned about the potential for increased volatility. Despite the lack of positive breadth days this month, the index has managed to post modest gains, defying historical patterns that typically associate negative breadth with negative returns. This unusual market behavior is occurring in an environment of high valuations and speculative investments, raising questions about the sustainability of current asset prices. The inclusion of speculative stocks like MicroStrategy in major indices further highlights the disconnect between traditional valuation metrics and current market dynamics.
The Invesco S&P 500 Equal Weight ETF (RSP) has mirrored the underlying index's performance, rising 0.27% to $182.66 as of 10:40 AM on Monday, December 16.