Market charts suggest potential for S&P 500 Equal Weight ETF recovery

In December, the S&P 500 saw a significant decline in market internals, with more stocks falling than rising. Despite this, major growth stocks kept the index near its all-time highs. The Invesco S&P 500 Equal Weight ETF (RSP) experienced a 6.6% drop, its worst since September 2022. So far in January, RSP has rebounded by 1.3%, outperforming the S&P 500's 0.6% gain. A recent positive reversal in RSP suggests potential for further gains, especially after a weak trading period. However, for a sustained uptrend, RSP needs to establish higher lows. Market rotation among sectors has been crucial for preventing larger declines. The early January rotation indicates a shift in performance, which may support further advances for both the S&P 500 and RSP if it continues.