"Breadth looks unusual"

1. Oil: 2022 vs. 2026. "Roughly 200 days after the US and Israel attacked Iran, oil is $25 above its preinvasion price. At this point following Russia's invasion of Ukraine, the shock had reversed, with prices $7 below their preinvasion price"

2. Price vs. breadth. "Breadth looks unusual. The S&P 500 is within 1% of its all-time high, yet fewer than 31% of its stocks are above their 50-day SMA. Since late 2006, this has occurred on only two prior trading days, both in December 2024."

3. Semis vs. SPX. "At the start of the month, the 100-day relative spread between semiconductors and the S&P 500 was falling from its extreme relative momentum reading in May. Today, the spread has fallen below its 20-year average."

4. SPX seasonality. "October has been the best month in midterm years historically and November the second best. We wouldn't be surprised to see some early buying ahead of this starting now."

5. Small vs. Large. "Small vs large cap valuations move in regimes. Targeting a pre-COVID valuation spread has not worked. The valuation spread is partly a function of margins. Net net, small caps need better margins relative to large caps for a durable rerating."

ICYMI