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 index's modest gains in December, the lack of positive breadth days since the start of the month is the longest such streak since 1997. This unusual market behavior is occurring in an environment of high valuations and speculative investments, raising questions about a possible market bubble. The inclusion of speculative stocks like MicroStrategy in major indices further highlights the disconnect between asset prices and traditional valuation metrics. Analysts are closely watching for any shifts in investor sentiment, particularly in light of the Federal Reserve's anticipated "hawkish cut," which could impact market dynamics.
The ProShares UltraPro S&P 500 (UPRO) ETF has responded to these market conditions by rising 1.32% to $98.75 as of 10:40 AM on Monday, December 16.