92% of S&P All-Time Highs Came With a Mag 7 Name in a Correction

The S&P 500 closed Friday at an all-time high. At the same moment TSLA sat 34.1% below its own high, META 25.6% and GOOGL 13.3%. MSFT was 10.0% below, close enough to make it four.

Some might think this is a divergence, and divergences usually function as a warning. So it is worth asking how often the index has printed a high while its biggest names were down.

This is the norm

Since June 2012, SPX has closed within 1% of its all-time high on 1,204 sessions. For each one we looked up how many of the Mag 7 were 10% or more below their own all-time highs at the time.

On 92.4% of those sessions, at least one of the Mag 7 names was already in a correction. Three or more were in a correction on 46.9% of them, which is exactly where we sit today. The truly unusual outcome is the top row: every one of the seven trading within 10% of its own high at the same time the index printed a high. That combination has only occurred on 91 of the 1,204 sessions.

Why an index high has never said much about its members

The seven do not peak together. TSLA topped in a different quarter from META, which topped in a different quarter from GOOGL. The index only needs enough of the group working to clear its own prior high.

Since the pattern has always been there, the warning people attach to it is false.