Don here...
Seven stocks now control more than a third of the entire S&P 500.
When concentration reaches these levels, markets don't just correct…they collapse.
Blake Young took this a step further: the S&P 500 itself is the second strongest performer when measured against individual sectors.
Think about that for a moment. How does the broad market outpace 90% of its own sectors?
The answer: Seven stocks now account for 35% of the entire index weight.
The Magnificent Seven have become so dominant that they're dragging the entire market higher while most sectors struggle to keep up.
Blake's analysis went deeper than just the concentration risk:
The Dollar Disconnect: The dollar dropped 1.25%, which mathematically should have driven equity indexes up 3.125%. But the NASDAQ only gained 2.5%. Something doesn't add up. Either there's more upside coming or the dollar was oversold and will bounce.
Capital Flow Reality: Blake demonstrated how to track actual money movement using MarketWatch data. Today showed $2.75 billion flowing into advancing stocks versus just $203 million into declining ones…a 13-to-1 ratio that tells the real story behind price moves.
The Basic Materials Edge: While everyone watches tech concentration, Blake identified the sector positioned to benefit regardless. Mining and materials companies are sitting on record-high margins. They don't need commodity prices to rise, they just need them not to fall.
Specific Setups: Blake detailed trades in IP (International Paper), Newmont targeting $76, and the XME mining ETF setup. His analysis of IP alone showed potential for 250% returns if his targets hit.
The sector rotation is accelerating. Healthcare and Energy, the six-month laggards, have become three-month leaders alongside tech. This kind of rotation typically precedes major market shifts.
When concentration reaches these levels, the market becomes fragile. Blake's positioning for what comes next.
→ Watch Blake's complete analysis here
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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