Momentum stocks just hit their highest relative level versus the S&P 500 in more than four years.
Here’s the chart:
Let's break down what the chart shows:
The chart shows the relative ratio between the Momentum Stocks and the S&P 500 in black.
The Takeaway: Momentum is back in control again.
The MTUM vs SPY ratio just pushed above the same ceiling that rejected every rally attempt for more than four years. Now buyers are finally forcing through it.
And this breakout is happening while the S&P 500 itself is already sitting near all-time highs. Momentum is not recovering from weakness. It is accelerating while the broader market already trends higher.
This is no longer just a story about one or two mega-cap AI stocks dragging the market higher. The top holdings inside this ETF pushing toward 52-week highs now include semiconductors, aerospace, exchanges, financials, and industrial names. Leadership is spreading.
Technology still sits at the center of the move. Nvidia, Broadcom, Advanced Micro Devices, Micron Technology, Applied Materials, and Lam Research are all pressing near highs together.
But the bigger tell might be the names further down the leadership list. Rocket Lab, Comfort Systems USA, Vertiv Holdings, Credo Technology Group, Jabil, and Coherent are all sitting close to highs too. That is when momentum starts spreading beyond the obvious names and into the next layer of leadership.
That is where we want to hunt right now. The strongest stocks in this momentum basket are already proving themselves. In bull markets, leadership usually stays with the leaders. And right now, this chart is giving us a roadmap for where that leadership sits.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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