The Tide is Still Rising
Dan Russo, CMT®
June 15, 2026
In addition to my role as Co‑CIO at Potomac, I teach a college class on technical and market analysis. One of the hardest concepts for students to grasp is that it is easier to swim with the tide than against it. Everyone wants to buy what has gone down a lot and sell what has gone up a lot.
Then I ask them one question:
“If I dropped you in the ocean a mile from shore and told you to swim back, would it be easier if the tide were rising or falling?”
That’s when the light bulb goes on. The same is true in markets.
S&P 500 and NASDAQ 100
Both indices tried to move lower last week. Both rebounded to close in the upper half of the weekly range. Both remain above their rising 60‑week moving averages.
Source: Optuma
NYSE Advance/Decline Line
Breadth also remains bullish. The NYSE Advance/Decline Line continues to push toward record levels. The one year stochastic is back near 95% after failing to hold below 60% in the spring. The near term downtrend in the stochastic has also been broken.
Source: Optuma
NYSE Decliners and New Lows
For a bear market to take hold, stocks need to go down and stay down. That typically comes with a sustained expansion in new lows.
We are not seeing that.
The five‑day moving average of decliners is trending lower, and the percentage of stocks making new lows is also declining.
Source: Optuma
Small Cap Stocks
We do not spend much time on small caps, and for good reason. By construction, small cap indices fight the tide. Winners graduate out, and laggards tend to stay behind.
That said, we are now seeing strength here on both an absolute and relative basis. That’s a sign that investors are willing to take on risk.
Source: Optuma
S&P 500 Equal Weight
This may be the most impressive chart in the note. The bears tried to push the Equal Weight S&P 500 lower, but the index snapped back and closed at record highs.
Even more telling, it outperformed the cap‑weighted S&P 500 and NASDAQ 100 during the rebound.
The bears found out that swimming against the tide is exhausting.
Source: Optuma
Final Thoughts
Assuming you know how to swim, if I took you on a boat, dropped you a mile offshore, and told you to make it back to the beach, it would be better for you if the tide was rising.
The same is true for investors. It is easier to be bullish in a bull market, and invest with the trend, then to try to fight it.
The market tide is still rising.
