Sector Watch: Tiny Bubbles

The S&P 500 has gained around 25% since its low on October 27, 2023, until the high on March 7, seen across all sizes, styles, and sectors. The “500” has set its 16th all-time high on March 7. However, some indicators suggest that the market is overbought with high bullishness, extreme greed, and a high percentage of S&P 1500 sub-industries trading above 50- and 200-day averages. Investors' optimism is high, but it's important to be aware of these indicators. Post-recovery digestions of prior gains averaged 8%, followed by a subsequent bounce of 10.6%.