• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Unmasking Market Moves: Why Focusing on Individual Stocks Beats Indexes in 2024
Stock

Unmasking Market Moves: Why Focusing on Individual Stocks Beats Indexes in 2024

by July 4, 2024
by July 4, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Many chatter and mentions of weak or narrow breadth are floating around these days. I plead guilty as well.

I want to approach this from another angle using some of the major US stock indices for this article.

I usually examine the market using sectors or a growth/value/size breakdown, with the S&P and Dow Jones indices playing a major role. But there is more.

Major US Stockmarket Indices

The first RRG shows the rotation of some of the major US stock market indices against the benchmark S&P 500.

I have added the table below the graph as a legend for the symbols on the tails, as they may not be so mainstream.

The tails and the accompanying performances are shown over a five-week period. All the broader indices are camping inside the lagging quadrant and traveling at a negative RRG-Heading, while the narrower-based indices are inside the leading quadrant and on a strong, 0-90 degrees RRG-heading.

There is no index inside the improving quadrant or the weakening quadrant. This indicates the clear split between these two groups.

The only exception concerning “broader” indices is the Nasdaq Composite index ($COMPQ) with 2500 stocks. However, this index is, very, heavily tilted toward the software & It services and technology equipment stocks. The exception on the “narrower” indices is the DJ Industrials index, which has a relatively low exposure to the technology sector, also because of its price-weighted approach.

When I remove $COMPQ and $INDU and set the tail length to 3 weeks for better visibility, this is the chart that remains. I found it interesting that the further you go to the right, the smaller the index becomes in terms of stocks in the index, not necessarily in market capitalization.

NY FANG Beats All

The next step was to zoom in on the rotation of $NYFANG.

When I set the tail length to 30 weeks, the exact same indices show up on top, with $NYFANG handsomely beating all other indices in this group. When you open up this RRG, live (click on the chart), you have to scroll back to 3/13/2023 before $NYFANG drops from the first place over a 30-week period. That’s a pretty impressive period (trend).

Even Inside The NY FANG Index, The Base is Narrow

And finally, let’s zoom in on the members of the NY FANG index.

This RRG shows the rotation for the NYFANG members against $NYFANG. The first observation is a high concentration of stocks inside the lagging quadrant. Except for SNOW and AMD, they have beaten the S&P 500 over this 5-week period. But not $NYFANG. Only TWO stocks have outperformed $NYFANG over this 5-week period: TSLA and NVDA.

Looking back, 30 weeks shows that only NVDA, META, and NFLX have beaten $NYFANG.

The big spread between the top and bottom of the list, +38.4% for TSLA and -1.8 % for AMD, also shows that the performances are very stock-specific. Even within the same sector, big differences show up. MSFT (Technology/ software) shows an 11% gain vs. SNOW in the same group, with a 4.9% gain.

The difference is even bigger in semiconductors. NVDA (Technology/semiconductors) +17% against a loss of 1.8% for AMD in the same group.

The main takeaway from all this, IMHO, is that the foundation is indeed narrow and concentrated in large cap, offensive/growth stocks. This group of stocks can still keep the S&P 500 going up or at least remain sideways during transition periods. This is caused by individual stocks rotating through very strong, relative trends.

As long as this situation persists, I believe it will be much more important to focus on individual stocks first, then sectors, and only then the broader market.

Happy Fourth Of July, –Julius

You Might Also Like
  • Block and Loaded: Targeting Gains in SQ
  • Equities Continue Surge Amid “Healthy” Rotation
  • Stock Market Indexes Plunge After Hitting Resistance — Support Levels You Need to Watch
  • Will the Fed End Its Tightening Cycle in September?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
July 4 travel hitting a record thanks to lower gas prices, humming economy
next post
UK election exit polling suggests Labour is headed for landslide victory

You may also like

The July 6-Month Calendar Range Hits August Doldrums

August 7, 2023

Top 3 Pitallfs YOU Probably Make When Trading

July 13, 2023

Dow Jones in the Spotlight, Bonds Stabilize, Tech Plays Catch-Up

September 20, 2024

Breadth Indicators Illustrate Recent Dire Conditions

October 10, 2023

When Facing a Market Pullback, RUN THESE SCANS!

September 11, 2023

200-Day Moving Average Confirms Bearish Phase

April 17, 2025

Rates Look Set to Rise as TLT Resumes its Downtrend

March 17, 2024

Stock Market Stuck with a Plethora of Mixed Signals

February 4, 2023

Bulls Show Their Might in First Quarter — Now What?

April 7, 2023

Charting the Great Rotation of 2023

August 12, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How I Triple My Returns With 3x Leveraged ETFs!

      July 10, 2025
    • Want Faster, Lower Risk Trades? Use This Setup

      July 9, 2025
    • The Seasonality Trend Driving XLK and XLI to New Highs

      July 9, 2025
    • Small Caps Are Rotating In — Here’s Why It Matters

      July 9, 2025
    • Amazon extends Prime Day discounts to 4 days as retailers weigh tariffs and price increases

      July 9, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,630 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,576 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,449 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,167)
    • Investing (538)
    • Stock (2,661)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How I Triple My Returns With 3x Leveraged ETFs!

      July 10, 2025
    • Want Faster, Lower Risk Trades? Use This Setup

      July 9, 2025
    • The Seasonality Trend Driving XLK and XLI to New Highs

      July 9, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,167)
    • Investing (538)
    • Stock (2,661)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Silver Cross Index is Topping on...

    January 5, 2024

    Crude Oil Disagreeing with the Canadian...

    September 29, 2023

    10 Crucial Charts Shaping The Markets...

    October 6, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here