For instance, the tech-heavy Nasdaq 100 fell 8.8%, much harder hit than the S&P 500 Equal Weight index, down only 4%. And the rebound rally since then leaves the equal weight S&P just 1% away from new record highs.<\/p>\n
For my money, the equal weight index is a far better measure of the “average” large cap stock. That’s because it’s not dominated by a handful of huge stocks (Nvidia, Microsoft, Apple, etc.) like the capitalization-weighted S&P 500 is.<\/p>\n
It was these mega-cap giants, plus the market’s hottest stocks, that were hit hardest.<\/p>\n
Just take a look …<\/p>\n
- \n
- WisdomTree Quantum Computing ETF (WQTM) -21.3%<\/li>\n
- Themes Generative AI ETF (WISE) -19.5%<\/li>\n
- Bitwise Crypto Innovators ETF (BITQ) -34.4%<\/li>\n<\/ul>\n
It was mainly a speculation selloff<\/em> among the most overheated stocks and sectors – especially anything<\/em> crypto-related.<\/p>\n
Meanwhile, the average stock barely budged, as measured by the equal weight S&P 500, and some sectors moved higher as the hot money rotated into cheaper alternatives:<\/p>\n
- \n
- Healthcare +10.2%<\/li>\n
- Transportation +1.7%<\/li>\n
- Consumer Staples +2.9%<\/li>\n<\/ul>\n
And it’s possible that this speculation selloff<\/em> isn’t over yet. It could turn into a bigger correction (-10% or more<\/em>).<\/p>\n
But there is an easy way to keep an eye on the underlying health of the stock market, by periodically checking the TradeSmith Market Outlook<\/em><\/strong> page.<\/a><\/p>\n\n
![\"\"](\"https:\/\/jeffclarktrader.com\/market-minute\/wp-content\/uploads\/2025\/12\/jmu-12.4.25-1.png\")
<\/figure>\n\n\nSubscribers with access to this valuable data can simply click on the Markets<\/em> tab from the main menu bar, then select Market Outlook<\/em>.<\/p>\n
Next you can choose to click on several major indexes including the S&P 500, Nasdaq 100, Dow Jones Industrial Average and more, to dig deeper.<\/p>\n
Pay particular attention to our Health Distributions section shown below for a valuable snapshot of market breadth.<\/p>\n\n
![\"\"](\"https:\/\/jeffclarktrader.com\/market-minute\/wp-content\/uploads\/2025\/12\/jmu-12.4.25-2.png\")
<\/figure>\n\nSpecifically, you’ll see a detailed breakdown including:<\/p>\n
- \n
- Health<\/strong> indicator distribution (Green, yellow, or red zone)<\/li>\n
- Trend<\/strong> distribution (up, sideways or downtrend) and<\/li>\n
- Stock Rating<\/strong> distribution (ranging from Strong Bullish to Strong Bearish).<\/li>\n<\/ul>\n
Keep an especially watchful eye on changes to the Health Indicator Distribution<\/a>. This is our simple traffic-light system (green=go, yellow=caution, red=stop<\/a>) and it’s designed to help you quickly assess the health of any stock, or an entire index, like the S&P 500 shown above.<\/p>\n
To quickly see how healthy stocks really are, I look at the difference between green and red zone stocks, which is shown in the distribution by hovering over that section of the chart.<\/p>\n
Here’s what to look for…<\/p>\n
As you can see in the white box in the chart above, at the recent low, the number of green zone stocks was 47.9% while the number of red stocks was just 33%.<\/p>\n
That’s still a bullish distribution with most stocks still healthy according to this indicator.<\/p>\n
Since then we’ve seen nice improvement in the health distribution, as shown in the black box at upper right.<\/p>\n
As of yesterday, the number of green zone stock climbed to 59.24%, while the number of red stocks fell to 31.53%.<\/p>\n
As long as the market’s health distribution keeps improving, stocks can continue to move higher.<\/p>\n
- Trend<\/strong> distribution (up, sideways or downtrend) and<\/li>\n
- Health<\/strong> indicator distribution (Green, yellow, or red zone)<\/li>\n
![\"Signature\"](\"https:\/\/image.exct.tradesmith.com\/lib\/fe8213727c6200757c\/m\/1\/34a6d15e-eaf1-4c10-bf47-a783782acc4a.png\")
<\/p>\n