The S&P 500 is showing resilience despite a streak of negative breadth, maintaining a modest gain for December. This unusual performance is occurring in a market environment marked by high valuations and speculative investments, such as MicroStrategy's recent inclusion in the Nasdaq 100. Analysts are concerned about a potential market bubble, as speculative stocks rise while the broader index lags. The S&P 500's ability to defy traditional valuation metrics and maintain gains suggests potential volatility, especially with the Federal Reserve's anticipated "hawkish cut" that could shift investor sentiment. Historically, negative breadth has correlated with negative market returns, but the current market dynamics indicate a significant deviation from this pattern.
The Direxion Daily S&P 500 Bull 2X Shares (SPUU) saw a slight increase, rising 0.36% to $157.61 at 10:40 AM on Monday, December 16.