My Favorite Market Playbook

There’s A LOT of market data out there.

So much, that at any given time you can find a chart, stat, or study to back up whatever story you want to tell.

That’s the real enemy in this game…the bias we bring to the data.

The antidote is simple but not easy: weight the evidence. 

Don’t stop at finding a data point that matches your opinion.

Stack the signals, count them up, and let the majority call the play. 

If there are nine bullish points and two bearish ones….who cares about the two?

Fortunately, I learned this lesson before I ever touched a stock chart.

I started my career as a CPA, building financial statements for companies.

In a field with so many degrees and resources the data was often the enemy. 

Too many numbers, too many narratives, too many signals that could distract from the simple question: what’s the real story of this business? 

Bring that background into the investment world and it’s easy to see there’s no difference…people find the data they want and ignore the data they don’t.

This has led to constant iterations in my own analysis.

I’ll always rip through hundreds of charts each week as it gives me a feel for the market that no model can replicate. 

But I continue to added more composite frameworks to weigh the data I see with my eyes.

These frameworks don’t just spit out noise; they filter, weigh, and separate the rules from the exceptions.

That makes the analysis less about me and more about the evidence.

My job isn’t to convince you, it’s to present the score as the data shows it.

The goal in any field of study should be to get closer to the truth, and in markets that means stripping away bias as best we can.

So let’s dig into one of my favorite market breadth composites for the S&P 500.

I’ll start with the chart.

Take a second to read it before diving into my thoughts below.

This model looks at all 11 S&P 500 sectors.

It weighs them by their influence in the index, classifies them as offensive or defensive, and then measures their breadth across multiple timeframes using moving averages.

In other words, it blends who’s on the field (offense vs. defense) with how strong they are (short, intermediate, and long-term trends).

• Columns → Moving Averages (Trend) Across Timeframes

  • 5 & 20 day = short-term breadth (momentum, thrusts, pullbacks).

  • 50 & 100 day = intermediate-term breadth (confirmation vs. deterioration).

  • 200 day = long-term breadth (structural health, conviction).

• Rows → SPDR Sectors

  • Ordered offense at the top (Tech, Discretionary, Financials) down to defense at the bottom (Staples, Utilities, Healthcare).

• % Colors → Participation

  • Green = broad strength (lots of stocks above trend).

  • Red = fragility (few stocks above trend).

• Sector Weights → Influence

  • Big sectors like Tech carry the most weight in the S&P 500, so their breadth matters most.

Pro Tip: You can break this framework into four quadrants. It quickly shows where strength is concentrated and whether conviction is coming from the right places. Right now, the top-right quadrant (long-term offense) is dominant, especially when compared with long-term defensive trends.

The framework works like a playbook.

Short-term trends (5 & 20-day) give the first warnings. 

Intermediate-term (50 & 100-day) confirm whether those warnings are turning into something bigger. 

Long-term (200-day) gives the conviction.

Right now, that conviction lies with offense being on the field. 

All the offensive areas of the market — making up more than 75% of the S&P 500 — are not only holding strong across the longer-term columns, they’re crushing the defensive areas. 

That dominance is the structural backbone of this Bull Market.

Yes, some short-term breadth is wobbling in Discretionary, and Tech may be stretched. 

But in the context of powerful long-term uptrends, those dips or extensions aren’t red flags.

They’re opportunities. 

Either to buy into strong long-term trends on weakness, or to let the hot areas cool down before resuming their run.

The playbooks if calling for offense to be on the field. 

When offense is on the field, you don’t sub in your defensive players and the market continues to keep them on the bench. 

As long as Tech and its offensive teammates keep their long-term breadth intact, the bull case carries the conviction.

Sidenote: If the backdrop starts to change, the short-term data will be the first to let you know. For some reason, people think that being bullish means you won’t recognize the bear signs when they show up. But this chart will literally change over time — it’s agnostic of my views.

Offense is on the field….ACT LIKE IT!

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