Impressive price and breadth uptrends remain intact - The S&P 500 and Russell 2000 small-cap indices made new all-time highs again this week keeping their price trends firmly intact. Peeling the onion to look inside these indices, participation or breadth, as measured by the S&P and NYSE advance-decline lines, also remain in confirmed uptrends and are not signaling any meaningful deterioration yet. As I write this note on Friday afternoon, the Russell 2000 has pulled back over the past 2 days after a 12.7% rebound from just the January 4th lows that extended the rebound that began in late September 24 lows to over 50%. Impressive moves to say the least!

Minor divergence to keep an eye on heading into February - I continue to expect a temporary, multi-month pullback or pause to develop for equity markets in Q1 given our weekly momentum indicators are moving toward overbought levels. However, at this point, there is not a lot of meaningful technical evidence to conclude a correction is beginning. I would highlight that in the very short-term there are a few divergences I will be monitoring closely in the coming weeks. Specifically, the Russell 2000 made new price high on January 20th but relative performance versus the S&P 500 has diverged this week peaking on Janua...

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