Most traders and investors don’t realize that the U.S. stock market is capitalization-weighted.
That means names with bigger market caps carry greater percentage weights in the index, and vice versa for stocks with smaller market caps.
So despite the fact that the S&P 500 and Nasdaq 100 are home to 500 and 100 stocks, respectively, the bigger a stock is, the more voting power or control it has over the broader market.
They’re so big that they can control the movement of most other stocks in the index. So six or seven big names can completely control the entire index or sector.
That’s why market internals are so important to watch…
Why Market Internals Are Important to Watch
If WealthPress Senior Strategist Roger Scott was just some guy you found on the street, he’d probably tell you the market looks great because it just made an all-time high.
How could things get any better than that?!
But he knows better…
When you look at the market internally, things look a lot different.
We’re in a strong uptrend, but price is diverging and the relative strength index can’t sustain these levels — a big sign that the market could be overbought.
If you’re one of Roger’s long haulers, then you already know he gets serious when it comes to momentum levels.
But if you’re just starting out trading or are new to WealthPress, this should be an eye-opener. And what we mean by that is Roger is about to show and tell you how he looks at the stock market from an internal perspective.
Check out my short video on why market internals are so important. And before you head out, be sure to share your thoughts in the comments section below.
Don’t forget to subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video!
P.S. Decades of experience with top hedge funds like Bear Stearns have earned me the nickname “The Master Trader.”
I used this exact strategy with linked stocks to turn $5.1 million into over $700 million during my career on Wall Street.
And Thursday at 1 p.m. EDT, I’m giving Main Street traders all of the details on how they could use linked stocks to potentially make big money off the markets!