Core Viewpoint - The market is experiencing a rotation from large-cap technology stocks to small-cap stocks, with the Russell 2000 Index (RUT) reaching all-time highs, indicating potential bullish sentiment in the market [1][2]. Group 1: Market Trends - Strong net inflows into global equity funds were observed, particularly in US and emerging market equity funds, totaling $71 billion compared to only $2 billion the previous week, marking a significant increase [2]. - The RUT has outperformed the S&P 500 Index (SPX), with a 7% increase in 2026 despite a 2% pullback on one day, while the SPX has struggled to maintain its late-October all-time high [3][6]. - The SPX has been rangebound since mid-November, primarily due to a rotation out of mega-cap technology stocks into smaller, underperforming stocks from the previous year [4][5]. Group 2: Technical Analysis - The SPX has not made significant progress relative to its late October highs, while the RUT has rallied over 10%, indicating a divergence in performance between small and large-cap stocks [6][9]. - The SPX is currently near all-time highs with multiple support levels below, including the 2025 close and its 80-day moving average, but faces technical resistance just overhead [9]. - High short interest in RUT components suggests potential opportunities in sectors outside the mega-cap technology group, which is currently weighing down the SPX [9][10].

Group 1 - The stock market's rally on Tuesday has quickly diminished, with the S&P 500 down 0.1%, the Dow up 64 points (0.2%), and the Nasdaq Composite's gain reduced to 0.2% [1] - The market is experiencing a situation of "bad breadth," indicating that while some stocks are rising, the overall market performance is weak [2]