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S&P 500 Cap Weight Vs. Equal Weight Divergence Sends Sell Signal Warning

ByChris Kimble
Published 09/15/2023, 02:54 AM
US500
-0.53%

We often watch the performance of cap-weighted indexes versus the equal-weight counterpart.

Why? Because divergences in performance often signal market turns.

Cap Weight Vs. Equal Weight

Today is no different as we display the performances of the S&P 500 cap weight index versus the S&P 500 equal weight index.

And, as you can see, there is a wide divergence brewing.

The past 2 times that the cap-weighted index was performing much stronger than the equal-weighted index, stocks were near a short-term high. And shortly thereafter they declined sharply.

We are seeing the largest spread in the past 6 years between the two indexes right now and the question we should be asking ourselves is: Will the result be different this time?

Might be time to monitor your risk trading profile. Stay tuned.

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Latest comments

Japan ScenarioSep 15, 2023, 08:15
People entering long right now are mentally regarded
Sep 15, 2023, 05:16
Hopefully sir. We are trapped many times
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