January 24, 2025
Good morning,
Through 4 days this week, the major global equity indexes are up about +2% across the board (except EM at +1%), and with Futures off slightly this morning (-.15%), we’re probably looking at another bullish week of gains to add to last week’s. There is some significance to this week’s confirming bullish behavior.
If you were relegated to the proverbial deserted island and allowed to take along one market indicator to guide your future investment decisions, you would take “Big Mo.” It is a breadth indicator, a daily calculation of advancing and declining securities that reflect the changes in the underlying forces of supply and demand in the market. Remember, changes in supply/demand forces dictate price changes in the market. Big Mo is also known as “The Tape”, as in “Don’t Fight The Tape” – the cardinal rule of investing that has withstood the test of time.
For the first time since late 2023, this key indicator turned down three weeks ago. Recall that the corrective environment at that time was described as weak and damaging to market signals. There is a whole list of rules around authenticating major market signal changes. The volatility of a particular signal must be included when considering its veracity. Big Mo is unusually stable with low volatility; authentication is little more than giving it a few days to season once a change has occurred – it rarely reverses quickly.
Last week, Big Mo, a key breadth gauge, rebounded from its negative signal the week before. In the past, after rare quick reversals, the S&P 500 Index returns were mixed one month later, but they were above average 12 months later.
Against a chorus of bearishness from the market strategist/analyst community, we have the market messaging us that this bull cycle remains intact.
Be well,
Mike
Disclosures
Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. Registration does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. This material is for general informational purposes only and should not be construed as investment, tax or legal advice. It does not constitute a recommendation or offer to buy or sell any security, has not been tailored to the needs of any specific investor, and should not provide the basis for any investment decision. Please consult with your Advisor prior to making any Investment decisions. The information contained herein was compiled from sources believed to be reliable, but Robertson Stephens does not guarantee its accuracy or completeness. Information, views and opinions are current as of the date of this presentation, are based on the information available at the time, and are subject to change based on market and other conditions. Robertson Stephens assumes no duty to update this information. Unless otherwise noted, any individual opinions presented are those of the author and not necessarily those of Robertson Stephens. Performance may be compared to several indices. Indices are unmanaged and reflect the reinvestment of all income or dividends but do not reflect the deduction of any fees or expenses which would reduce returns. A complete list of Robertson Stephens Investment Office recommendations over the previous 12 months is available upon request. Past performance does not guarantee future results. Forward-looking performance targets or estimates are not guaranteed and may not be achieved. Investing entails risks, including possible loss of principal. Alternative investments are only available to qualified investors and are not suitable for all investors. Alternative investments include risks such as illiquidity, long time horizons, reduced transparency, and significant loss of principal. This material is an investment advisory publication intended for investment advisory clients and prospective clients only. Robertson Stephens only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Robertson Stephens’ current written disclosure brochure filed with the SEC which discusses, among other things, Robertson Stephens’ business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. © 2025 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.