20+ Charts & One Message
20 Charts in 20 Minutes
Yesterday I went live with All Gas No Brakes, the show where I rip through 20 plus charts in about 20 minutes pulled from my Thursday night review of hundreds of charts.
It’s consistently the most well received show I do.
It forces me to zoom out, stop overthinking individual names, and listen to what the market as a system is actually saying.
And that’s the key point.
I can control the process. I cannot control the message.
Right now, the message coming back from the market is frustrating but clear: be annoyingly patient (at the index level).
I don’t make the rules. The market does.
Even when patience is annoying, it’s still the correct posture.
With that framing in mind, let’s talk about the rotation, because it explains why this tape feels the way it does.
The Rotation is Cautious….
January’s leadership is coming from the smallest, least influential corners of the S&P 500, while the offensive heavyweights are lagging.
That’s why I’ve been spending more time looking under the surface in less obvious areas of the market over the past several weeks. The stocks that actually drive “the stock market” are chopping sideways.
Last week we talked about the Market of Stocks.
Before that, we looked at the BenchWarmers, areas outside of Tech where opportunity can still exist.
Not because I love what I’m seeing.
But because the market doesn’t care what I want to see lead.
What the scoreboard says….
Twitter tweet
This is a cautious rotation.
Energy, Materials, and Staples leading is not inherently “bearish,” but it’s not the rotation you want when you’re looking for broad-based, offense-led expansion.
Why this matters more than people admit
Here’s the trap: you can look at this and say, “But breadth is expanding.”
Sure. Some breadth metrics can improve when more stocks participate.
But the S&P 500 is not a breadth index. It’s a market-cap weighted index.
That means the market can show “healthier participation” and still go nowhere if the biggest weights are chopping sideways or lagging.
In other words:
Breadth expansion that’s led by low-weight sectors is a nice story, not a market driver.
The uncomfortable implication
This is why the tape has felt annoyingly patient.
If the offensive areas aren’t leading, and the big market cap engines are stuck in ranges, then you get exactly what we have: a market that middles sideways, with breakouts that struggle to follow through.
What would make this rotation more bullish
I’m not asking for perfection. I’m asking for confirmation.
I want to see:
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$XLK and $XLF stop lagging and start acting like leadership, and the “defensive leadership” (Staples / Energy / Materials) stop being the entire story, and instead become one chapter of a broader risk-on book.
Until then, the message stays the same:
Do the work, but don’t force the trade.
The market is still in “wait for resolution” mode.
Anyway, that’s my two cents.
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Cheers,
Larry Thompson, CMT CPA
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