After being left in the dust by the Magnificent Seven, the other 493 members of the S&P 500 index appear to be making a comeback.
See: A record share of S&P 500 stocks have underperformed the index in 2023 as ‘weirdest bull market in decades’ marches on
An ETF that tracks the S&P 500 equal-weighted index
RSP,
which assigns every S&P 500 stock a fixed weighting, on Tuesday achieved a “golden cross” for the first time since June.
FACTSET
A golden cross occurs when an asset’s 50-day moving average moves above its 200-DMA. The 50-DMA is a widely followed short-term trend tracker, while many view the 200-DMA as a dividing line between longer-term uptrends and downtrends. A golden cross is often seen as a confirmation of a positive shift in an asset’s long-term trend.
That could portend more gains ahead for the equal-weighted index as a number of Wall Street strategists advise their clients that the catch-up rally that has taken place since November could have more room to run in 2024.
The golden cross marks the culmination of a 16% rally for the ETF since Nov. 1, according to FactSet data. By comparison, the traditional market capitalization-weighted S&P 500
SPX
has gained 12.7% over the same period, although it is presently trading just shy of its record closing high.
However, the S&P 500 is still handily beating its equal-weighted sibling this year, having risen 24.4% compared with 11.9% for RSP, according to FactSet data.
See: A record share of S&P 500 stocks have underperformed the index in 2023 as ‘weirdest bull market in decades’ marches on
Several other securities and assets are either nearing, or have recently breached, key technical levels, markets data show.
U.S.-traded crude-oil futures
CL.1,
CL00,
notched a “death cross” on Tuesday, as MarketWatch reported. A death cross occurs when a short-term moving average moves below a long-term moving average.
Small-cap stocks in the U.S. and Europe, meanwhile, are on the cusp of notching fresh golden crosses of their own.
See: Small-cap stocks are nearing a ‘golden cross’ as year-end rally heats up
In Europe, both the euro
EURUSD,
and the Stoxx Europe 50
FSTX00,
were creeping toward golden crosses of their own.
The Europe 50 traded marginally higher on Wednesday at 4,079.44. Its 50-day moving average stood at 3,951.95, while its 200-day stood at 3,962.25.
FACTSET
The euro gained 0.6% against the U.S. dollar to trade at $1.11. Its 50-day moving average stands at $1.08, while its 200-day stands at $1.09.
FACTSET
Finally, a team of technical strategists at Renaissance Macro pointed out in a note shared with MarketWatch on Wednesday that yields on benchmark European bonds, including the 10-year U.K. gilt
BX:TMBMKGB-10Y,
the 10-year German bund
BX:TMBMKDE-10Y,
the 10-year Italian BTP
BX:TMBMKIT-10Y
and the 10-year French OAT
BX:TMBMKFR-10Y
are nearing death crosses of their own.
RENAISSANCE MACRO
Keep in mind, bond yields move inversely to prices, falling as prices rise.
