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Cycle · 3 – 12 monthsBreadth data through 2026-07-14 · updated after every close

Cycle Tracker: Is the Average Stock Confirming the Index?

Mixed participation — the average stock (equal-weight RSP) sits 0.7% off its 1-year high vs 1.0% for the cap-weighted S&P 500, a 0.3pp gap (narrowing), and repair flow is stuck. This reads the market's participation phase, not its price trend: one level gauge (the drawdown gap) and one velocity gauge (repair flow), both rule-based, both daily, with forward base rates for every regime since 2010.

What drives today's read

The gap

0.3pp and narrowing — the average stock is keeping pace with the index.

The flow

14.2% of stocks improving vs 17.0% deteriorating over 20 sessions — stuck.

Beneath the surface

The median stock is 19.4% off its own high — normal dispersion for a ~5,500-name universe, shown as context, not a signal.

Sources, methodology & freshnessLast updated 2026-07-14 · Open ↓
Source
Own daily price history: RSP & SPY (RSP backfilled to 2003) and the ~5,500-stock breadth universe for drawdown buckets and dispersion
Methodology
Level: RSP and SPY each as a drawdown from its trailing 252-session high; documented gap/drawdown thresholds label every day Broad / Hidden Bear / Washout / Mixed. Velocity: stocks bucketed by own drawdown (Healthy/Bruised/Damaged/Broken); repair flow = net share moving to a healthier bucket over 20 sessions → Healing / Stuck / Deteriorating. Forward SPY base rates per regime, 2010+, published either way. Full-universe dispersion shown as point-in-time context only (survivorship caveat stated).
Updates
Daily after the US closeLast: 2026-07-14
Maintained & reviewed by Yuriy Matso — methodology shown on the page.
Cycle tracker2026-07-14 · close
MIXED
0.3pp
participation regime · average stock vs index drawdown gap
Level
0.3pp
avg stock −0.7% · index −1.0% · narrowing
Velocity
-2.8pp
repair flow stuck · 14.2% up vs 17.0% down
Median DD
−19%
≥10% off
67%
≥20% off
49%
≥30% off
36%

Rule-based regimes on documented thresholds. Color marks today's condition, not expected return — the beaten-down regimes have been contrarian historically.

01

The level — the average stock vs the index since 2010

RSP drawdown minus SPY drawdown, in percentage points, with SPY riding the top pane for context. Green above zero: the average stock is holding up better than the cap-weighted index; red below: it is lagging — deeply negative readings with the index near highs are the hidden-bear signature. The equal-weight fund is used because it is investable and survivorship-free — two earlier in-house constructions failed exactly on that point and are documented in the methodology.

Window:
SPY (top pane, log) RSP − SPY drawdown gap at/above 0pp below 0pp

RSP drawdown minus SPY drawdown, daily since 2010. Endpoint: 0.3pp (mixed, narrowing).

02

The velocity — repair flow, healing vs deterioration

Participation's first derivative: the net share of stocks moving into healthier drawdown buckets over 20 sessions — green while the market is healing (above zero), red while damage is spreading. Flow has historically turned before the level: healing begins beneath the surface while the gap is still wide.

Window:
Repair flow (20s net) at/above 0pp below 0pp

Net share of stocks moving to a healthier drawdown bucket over the trailing 20 sessions, daily since 2011. Endpoint: -2.8pp (stuck).

03

What happened next — SPY after each regime

Average SPY return after every prior session in each regime, 2010+. Both studies are contrarian: Washout and Deteriorating preceded the strongest mean-reversion, Broad ran near baseline, and the validated warning is the divergence case — index near highs while repair flow deteriorates.

By participation regime (level)

Broad

Days
357
Next 1 month
+0.0%
Next 3 months
+1.0%
Next 6 months
+3.4%
6-month win
64%

Hidden Bear

Days
454
Next 1 month
+1.5%
Next 3 months
+4.1%
Next 6 months
+9.6%
6-month win
93%

Washout

Days
72
Next 1 month
+8.5%
Next 3 months
+15.3%
Next 6 months
+22.8%
6-month win
100%

Mixed

Today
Days
2897
Next 1 month
+0.9%
Next 3 months
+2.9%
Next 6 months
+5.5%
6-month win
79%

All days (baseline)

Days
3780
Next 1 month
+1.0%
Next 3 months
+3.1%
Next 6 months
+6.1%
6-month win
79%

By repair-flow regime (velocity)

Healing

Days
1361
Next 1 month
+1.0%
Next 3 months
+3.0%
Next 6 months
+6.3%
6-month win
83%

Stuck

Today
Days
1228
Next 1 month
+0.8%
Next 3 months
+2.3%
Next 6 months
+4.5%
6-month win
73%

Deteriorating

Days
1171
Next 1 month
+1.4%
Next 3 months
+4.0%
Next 6 months
+7.6%
6-month win
82%

All days (baseline)

Days
3760
Next 1 month
+1.1%
Next 3 months
+3.1%
Next 6 months
+6.1%
6-month win
79%

Overlapping forward windows — adjacent sessions share most of their forward path, so sample sizes are optimistic. SPY price return, dividends excluded.

04

What flips this read

The participation regime shifts when the RSP–SPY drawdown gap crosses the documented thresholds on the Hidden Bear Index (Hidden Bear needs a wide gap with the index near its highs; Washout needs both deep in drawdown). Today's 0.3pp gap is narrowing. A turn in repair flow is usually the earliest confirmation of a regime change — watch its zero line (currently -2.8pp, falling).
05

What this page cannot tell you

Participation regimes describe what kind of market is carrying the index, not where the index goes next — Broad regimes ran close to baseline, and the strongest base rates in the study belong to the stressed states, read contrarian. The dispersion numbers (median drawdown, share of stocks 20%+ down) always look alarming in a ~5,500-name universe and must not be read as crash signals. And both gauges are breadth reads: they know nothing about valuation or the economy — those are the Bubble Tracker's and the economy pages' questions.

How Cycle Tracker Works

  1. 1
    The level: the average stock vs the index
    The "average stock" is the equal-weight S&P 500 (RSP) — chosen because it is investable and survivorship-free — compared with the cap-weighted SPY, each measured as a drawdown from its own trailing 252-session high. The gap between the two drawdowns is the cycle's defining number: near zero, everyone is participating; deeply negative with the index near highs, the index is masking damage underneath.
  2. 2
    Rule-based participation regimes
    Documented gap and drawdown thresholds classify every day as Broad (average stock confirming), Hidden Bear (index near highs while the average stock is already down), Washout (both deep in drawdown) or Mixed. No judgment calls day to day — the same rules label 2011 and today.
  3. 3
    The velocity: Market Repair Flow
    Every stock is bucketed by its own drawdown — Healthy, Bruised, Damaged, Broken — and repair flow nets the share of stocks that moved to a healthier bucket against those that moved to a worse one over 20 sessions. It is participation's first derivative: the level says where the cycle is, the flow says which way it is turning. Regimes: Healing, Stuck, Deteriorating.
  4. 4
    Base rates for every regime, published either way
    Average SPY returns over the next 1, 3 and 6 months after every day in each regime since 2010, for both the participation and the repair-flow regimes. The honest finding is contrarian: the beaten-down states (Washout, Deteriorating) mean-reverted to the best forward returns, and the validated warning is the divergence case — index near highs while repair flow deteriorates.

Who Uses Cycle Tracker

Position traders
The 3–12 month clock: whether the advance is broadly owned or carried by a handful of mega-caps — the difference between a market that absorbs shocks and one that amplifies them.
Dip evaluators
Washout regimes — average stock and index both deep in drawdown — preceded the strongest 6-month returns in the study. The tables quantify the mean-reversion instead of asserting it.
Divergence hunters
The Hidden Bear regime is the named object for "the index is fine, the market isn't" — with the gap chart showing every prior episode since 2010.
Narrative checkers
When a viral chart claims "half the market is in a bear market", the dispersion strip (median stock drawdown, share 10/20/30% below highs) shows what those numbers normally look like — the typical stock is almost always well off its high.

Pro Tips

01
The gap matters more than either drawdown
Both series are usually off their highs; the cycle information is in the spread. A −2pp gap with the index at highs (hidden bear) and a −2pp gap in a crash (washout) are opposite regimes — which is why the rules condition on both.
02
Watch the flow turn before the level
Repair flow crossing zero has historically led participation-regime changes — healing begins beneath the surface while the gap is still wide. The validated warning runs the other way too: index near highs with deteriorating flow lagged baseline.
03
Do not headline the median drawdown
The median stock in a ~5,500-name universe is almost always 15–25% below its own high — small caps are volatile. That number is honest dispersion context, not a crash signal; the regime rules deliberately use investable RSP instead.
04
Broad participation is comfort, not a forecast
Broad regimes ran close to baseline forward returns — they describe a well-functioning market, not cheap upside. The asymmetric base rates live in the stressed regimes.

Common Issues & Solutions

Why equal-weight RSP instead of a custom average of all stocks?▾
Survivorship. Two earlier iterations failed exactly here: a cross-sectional median of individual drawdowns can never reach zero (a permanent fake drawdown), and an in-house equal-weight of the full universe inflates as a level because delisted losers drop out of the history. RSP is investable, survivorship-free, and checkable against any chart provider.
Why regimes instead of a 0–100 score?▾
The cycle is two-dimensional — level × velocity — and collapsing it to one number hides the combination that matters (e.g. index at highs + flow deteriorating). Named regimes with documented thresholds keep both axes visible and falsifiable.
Why does the history start in 2010?▾
The regime studies need our full breadth universe and RSP/SPY daily history on identical footing; 2010+ is where both are clean. RSP itself extends to 2003 on its own page.
Repair flow keeps flipping around zero▾
Near zero the flow is genuinely mixed — the Stuck regime exists precisely for that state. The signal is in sustained readings and in the divergence combination, not in day-to-day sign changes.

Frequently Asked Questions

What is the participation cycle?▾
Markets rotate between phases where the average stock confirms the index (broad participation), phases where the index is held up by a narrowing group while the average stock is already in drawdown (a hidden bear), and washouts where everything is down together. The Cycle Tracker labels those phases with documented rules and shows what SPY did after each since 2010.
What is a "hidden bear"?▾
The regime where the cap-weighted index sits near its highs while the average stock (equal-weight RSP) is already well off its own high — a wide RSP−SPY drawdown gap. The damage is real but hidden by the biggest names' index weight.
Is broad participation bullish?▾
It is healthy rather than predictive: Broad-regime days ran close to baseline forward returns. The stronger base rates are contrarian — Washout regimes preceded the best 6-month returns in the study, and deteriorating repair flow under an index near highs preceded below-baseline returns.
Why use equal-weight RSP as "the average stock"?▾
Because it is investable and survivorship-free. Home-built averages of the full stock universe systematically inflate as a level — delisted losers vanish from the history — and a median of individual drawdowns can never reach zero. RSP has neither flaw, and its history is independently verifiable.
How is the Cycle Tracker different from the Swing Tracker?▾
Swing reads internal condition for multi-week holds (1 week–3 months, five dimensions of daily internals). Cycle reads the slower participation phase (3–12 months): one level gauge (the RSP−SPY gap) plus one velocity gauge (repair flow). Swing answers "can I hold this for weeks?"; Cycle answers "what kind of market is carrying the index?"
How often does it update?▾
Every US trading day after the close — both underlying gauges are daily breadth computations, with no monthly or quarterly inputs.

Explore Other Tools

Hidden Bear Index
The level: RSP vs SPY drawdown gap with full regime methodology and history
Market Repair Flow
The velocity: drawdown-bucket transitions and the full transition matrix
Bear Market Breadth
Share of S&P 500 / Nasdaq-100 / Dow members 20%+ below their highs since 2011
Coppock Curve
The classic long-horizon momentum gauge — a slower cycle read on the index itself
Market Breadth
The daily MA-breadth backbone under all our participation tools
Last updated: 2026-07-14