The historically bullish November-April seasonal pattern is off to a great start, as attested by the stock market’s recent gains. Despite the running start, however, leadership in the market’s advance is narrowing as fewer big names are making new highs. In this report, we’ll discuss this problem in depth and isolate the main areas of weakness. My conclusion is that the market’s intermediate-term trend is strong enough to survive the current internal weakness based on solid forward momentum and economic strength. Short term, though, there will likely be some increased volatility.
The S&P 500 Index