Evidence Brief - 12 Dec 2025
A quantitative summary of market leadership, breadth, and positioning risk.
Regime check (weight of the evidence)
The tape keeps screaming risk-on expansion, even with rotational chop in the headline leaders.
Breadth Score: 100.00 (again).
70.72% of stocks above the 20-day, 63.97% above the 50-day, 65.03% above the 200-day.
Nasdaq net highs/lows at +131 - that’s not “a bounce,” it’s sustained participation.
Near-term: 5-day breadth cooled (55.24% above 5-day) which is consistent with a pause/shakeout inside an advance, not deterioration.
Leadership & flow
Sectors
Healthcare remains the structural #1 (3M #1, 6M #1) even with a flat week (−0.19%).
Technology down on the week (−1.98%) but still holds the long-term crown (12M #1; 6M #2). This is rotation, not trend failure.
Financial Services (+3.99%) and Industrials (+2.61%) are the tell: broader participation is real, and cyclicals are pulling weight.
Utilities (−2.53%) and Real Estate (−0.59%) remain the structural laggards.
Industries
The leadership cluster is extremely clear:
Metals & Mining +5.73% (12M rank #1)
Regional Banks +5.92% (improving cyclical breadth)
Retail +4.30% and Transports +4.05% (risk appetite + economic sensitivity)
Biotech +3.94% (still top-tier 3M/6M)
Robotics & Automation +3.83% (growth cyclicals participating)
Defense & Aerospace +4.02% (not purely risk-off—often a “spend cycle” signal)
Where the crowd is mis-positioned
They’re still obsessed with whether mega-cap tech is “acting right.”
Meanwhile, the real story is breadth + cyclicals + banks + transports + retail all moving together. That’s expansion.They’re underweight the “dirty work” of bull markets.
Metals/miners + regional banks leading is not a defensive tape. That’s capital leaning into inflation-tolerant cyclicality and balance-sheet sensitivity.They’re treating rotation as fragility.
Tech/semis pausing while everything else advances is the healthiest thing a rally can do. Narrow leadership is what kills bull runs. Broadening is what extends them.
Positioning implications (how I’d run risk)
Core exposure
Keep the core barbell:
Tech (secular compounding)
Financials/Industrials (broad participation + cyclical torque)
Healthcare stays a stabilizing anchor because it’s #1 in the 3M/6M stack.
Satellites (where the torque is right now)
Metals leadership is undeniable - express via miners/metals sleeve.
Regional banks (controlled size; they can gap on macro headlines).
Retail + transports as “risk appetite confirmation” trades, not forever-holds.
Biotech + robotics as growth cyclicals.
What not to do
Don’t chase rate-sensitive laggards (utilities/real estate) because they “feel safe.” They aren’t leading.
Don’t confuse semis weakness this week with “sell all tech.” Semis are still top-tier long-term; treat pullbacks as location, not signal-if breadth stays strong.
Risk triggers & playbook
Stay offensive while:
Breadth remains elevated: % >50-day stays >55% and net highs/lows stay strongly positive (call it > +60 as a working threshold).
Cyclicals (industrials/financials/transports/retail) continue to participate.
De-risk if:
20-day breadth rolls over hard (e.g., % >20-day drops <55%) AND net highs/lows fade toward zero.
Financials + transports roll over together while tech fails to resume leadership (that combination usually precedes broader digestion).
The “liquidity + breadth + trend aligned” thesis is consistent with the data this week: breadth is maxed, participation is broad, and leadership is rotating outward rather than collapsing. The correct posture isn’t “all-in on mega-cap tech” - it’s pressing risk into broader leadership while respecting that 5-day breadth is cooling (normal).
Talking my book
Stayed risk-on but methodical early in the week; did not rush sizing despite improving internals.
Managed expectations into the Fed - aware volatility could spike even with a bullish backdrop.
Did not materially change positioning Monday/Tuesday, focused on letting setups develop and waiting for confirmation.
After the Fed cut and liquidity announcement, treated the move as confirmation of the broader bull trend rather than a one-day reaction.
Added META via Apr 17 ’26 850C (low delta, longer duration) as a controlled way to stay exposed and roll previous META profits while managing volatility.
Acknowledged AMD and AAPL as the biggest drags on P&L late in the week, but viewed the weakness as normal pullback behavior, not a thesis break.
Did not panic sell on Friday’s volatility; treated it as a shakeout day.
Overall mindset: stay patient, respect breadth, and prepare to press exposure on strength, not during noise.