(Bloomberg) — While concern has grown in the past week that narrowing market breadth has tapped the brakes on the S&P 500 (^GSPC) Index’s blistering rally, it turns out that stock bulls are still stepping in to snap up shares ahead of the Federal Reserve’s interest-rate decision.

Most Read from Bloomberg

• How California Sees the World, and Itself

The index’s DVAN trend line — a proprietary divergence analysis that measures buying or selling pressure — has been on a buying streak since Election Day, with investors continuing to scoop up shares in multiple trading sessions heading into the closing bell in the past week, according to data compiled by Bloomberg. While the rally has stalled in recent days, severe weakness hasn’t emerged yet with price and breadth trends as the S&P 500 (^GSPC) sits less than 1% away from a record after 57 all-time highs in 2024.

Subscribe to the Bloomberg Daybreak podcast on Apple, Spotify or anywhere you listen.​​​​​​

“We don’t have signs of bearish breadth expansion to signify a reason to turn bearish,” said Andrew Thrasher, technical analyst and portfolio manager at Financial Enhancement Group. “The lack of bullish breadth alone isn’t enough to turn negative on the market, it needs to be followed up by an expansion of bearish data to provide confirmation — and we don’t have that just yet.”

It’s a head scratcher for some, given the S&P 500 is coming off 12 straight sessions with more decliners than advancers — the longest run in Bloomberg’s data history going back to 1996, while separate data suggests this is the second-longest stretch in a century, according to Deutsche Bank AG macro strategist Jim Reid.

While that has fueled worries that the rally is stalling into year-end with fewer stocks participating in the advance, Reid told clients in a note on Tuesday that the “only conclusion you can draw from this at the moment is that there is a stealthy but steady rotation into the Mag-7 from the rest of the market.”

Leadership has flipped back to growth sectors like consumer discretionary, communication services and technology that house most of the so-called Magnificent Seven stocks, while breadth deterioration is popping up in the energy, materials and health-care groups, with each trading below their respective 200-day moving averages. When sector strength is middling, the broader index tends to struggle.

Of course, the S&P 500 has staged a furious rally in four of the past six weeks, advancing nearly 5% since Election Day. But at the same time, things have been quiet underneath the surface as the index has gone 21 sessions without a swing of more than 1% in either direction, according to data compiled by Bloomberg.

While the S&P 500’s advance-decline line has yet to confirm fresh highs in December, strong breadth in the most heavily traded US stocks by share volume signals big money buying remains in place — a bullish sign, analysis from Stephen Suttmeier, technical strategist at Bank of America shows.

What’s caused concern, though, is that less than half of large-cap stocks currently trade above their 50-day moving average and recent weeks have shown a declining number of new highs, creating a divergence with the broader market trend. This is typically the first step to potential signs of bearishness — a lack of strength.

But to see bearish breadth expansion, it must be followed up by a growing sign of rising weakness, meaning prices of individual stocks going down, Thrasher explained. What traders aren’t seeing yet is an expansion of stocks declining.

For instance, Thrasher is monitoring the number of net new 52-week highs minus lows. This figure stood at -1.4% on Friday. Since the prior 2024 lows sat around -2.2%, he’s looking for a low to eclipse that as a sign that bearish breadth is expanding. Despite the index notching losses in five of the past seven sessions, its new 52-week highs are still greater than its new lows. Mid-month is historically when December has found its low for the month before year-end, per Thrasher.

While the Fed’s post-meeting statement is set to be released at 2 p.m. in Washington, investors will look for changes in the latest quarterly rates projections, known as the dot plot, and then pour over Chair Jerome Powell’s remarks a half-hour later for clues on the central bank’s guidance in the months ahead.

Officials are widely expected to cut rates for a third straight meeting and announce their Summary of Economic Projections, which may signal a slowdown in reductions in the coming months.

That’s why Willie Delwiche, founder and strategist at Hi Mount Research, is watching for whether the upside momentum will be consistent from here after the equal-weighted S&P 500 underperformed its cap weighted counterpart for the third straight week on Friday in the longest stretch since February.

“It is a story both of a rotation back into the Mag 7,” Delwiche said, “but also evidence of deterioration beneath the surface.”

Most Read from Bloomberg Businessweek

• The Property Brothers Say Hold Off on the Big Home Renovation in 2025

• China’s Housing Rescue Falls Short in City That Signaled the Crisis

• Crypto Got What It Wanted in November’s Election. Now What?

• Desperate Nursing Students Turn to Fixers for Their Clinical Training

• How Can the World Move Beyond Combustion Cars? Look to Norway

©2024 Bloomberg L.P.