The S&P 500 market-cap vs equal-weight ratio just cleared a long-term base — its first breakout in 22 years.
Here’s the chart:
Let's break down what the chart shows:
The black line in the top panel plots the S&P 500 market-cap weighted index relative to its equal-weight version.
Red line = 252-day moving average (1-year).
Blue line = 63-day moving average (3-month).
The black triangles in the bottom panel represent consecutive days the 63-day average has been above the 252-day average.
The Takeaway: This is the first breakout in this ratio above a long-term base since the early 2000s.
Over the past two decades, the market-cap weighted S&P 500 has had periods of strength over its equal-weight version — but never a sustained breakout like we’re seeing now.
The 63-day and 252-day moving averages confirm it, with the medium-term trend stronger than the long-term trend for 571 straight sessions — the longest streak ever recorded.
The last time we saw sustained outperformance from the biggest companies in the world — 1995 to 1999 — stocks across the board did well.
Leaders leading is not a warning sign.
In healthy bull markets, the biggest, most liquid stocks often lead first, pulling the index higher while the rest of the market follows in waves.
The danger isn’t leaders leading — it’s when they lead alone and breadth collapses.
That’s not the setup here.
Breaking above a 22-year ceiling doesn’t just flip a resistance level — it signals a new phase for this ratio, with the market-cap weighted S&P 500 trending higher relative to its equal-weight version.
If history rhymes, this trend could be the market’s biggest tailwind, not its biggest risk.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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