Record highs across the board. S&P 500, Nasdaq, Russell 2000, all setting new highs this week. Six straight weeks of gains. AI stocks leading the charge. NVDA, Apple, Intel dragging the indices higher.
But here's the number that's been stuck in my head: only 52% of S&P 500 components are trading above their 50-day moving average. Think about that. The index is at an all-time high, but nearly half the stocks in it are in short-term downtrends.
What that means: the record is being carried by a handful of mega-cap names. The average stock in the S&P 500 is actually underperforming the index significantly. If you're not holding the right 5-7 names, you're probably watching the index print new highs while your portfolio does nothing.
The last time we saw this kind of divergence was late 2024. Before that, late 2021. Both times, breadth eventually caught up to the index, not by the laggards rallying, but by the leaders pulling back.
Not calling for a crash. Not saying sell everything. But the risk/reward of chasing AI/mega-cap names at these levels, when the foundation beneath them is this thin, makes me uneasy. The upside is priced in. The downside isn't.
How are you positioning for this? Still adding to mega-cap tech or rotating into the lagging sectors that might catch up if breadth normalises?
(No position disclosure, just observing, no trades taken on this)
The S&P just hit 7,500 but nearly half the index is below its 50-day moving average, is anyone else concerned about this?
byu/Training-Extent9606 instocks
Posted by Training-Extent9606
21 Comments
Very worried. So much so I moved index funds into SGOV. Look at how many are at or near 52 week lows.
Concerning is spaceX Nasdaq debut date… Market will get ATH in June, then crash. Hope you sell your calls at the right time, meanwhile we cannot drop in this 🥠market. I am expecting some kind of US retreat on Iran this weekend so sell your oil longs!
As long as people like you keep using AI for shitposting like this the bubble ain’t bursting.
I mean how exactly are real estate and healthcare stocks innovating to bring in more money?
Yes the stocks mentioned are high but earnings are clear these companies are printing and that isn’t stopping this or next year due to the extreme demand for their services/goods.
So again what do the other stocks bring in terms of growth potential? Bc if it’s minuscule then you have your answer on why they are lagging.
I think you’re right. Today has been tough but i’m selling everything this afternoon for the impending crash. Once it crashes i’ll go back in.
Absolutely not, we’re going to keep shooting up minimum +20% every 3 months forever, its the new norm. No such thing as a crash or even a dip anymore, gets bought up within the same day, or at most within a week.
Not concerned.
If anything, it means it has still room to run
This is a good thing
Not concerned at all but I am trimming my winners and buying more beaten up names. Always gotta stay diversified.
Holding foreverÂ
If anything this makes me think we’re going to keep running.
Why do I see 5 of these posts every day? Why are people so concerned with the market going up? Just ride it out.
Using AI to say AI bubble is over
It’s always been like this. Not all 500 companies are going to perform well together. Tech companies are way more innovative and are leading the index higher. I don’t see any reason to worry as of now.
There is always a reason to be concerned. Every rally has skeptics. The point of all this is to make money. There’s endless amounts of takes (both bull and bear) every day all over the place. You can spend all day every day trying to understand it all. Or you can make money.
I will be concerned once this sub turns bullish lmao
breadth divergence at all-time highs is literally a textbook distribution signal, the index number means nothing if the average stock is already rolling over
No
Nothing new, this in particular is not a bearish indicator. There are lots of other ones but that’s growth sectors for you
Screwed once the Fed starts hiking. Look at the 10yr and 30yr yields. Inflation is here, maybe not structural, but it will spook the stock market. Just keep buying, these companies are proving their weight…nothing can stop that.