By Lawrence G. McMillan
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.99% is merrily making new all-time highs, and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.61% and the NASDAQ-100 /zigman2/quotes/210598364/realtime NDX +2.79% are right near all-time highs as well. So why does it seem like so many stocks are “struggling” in this environment?
Because very broad-based indicators, such as the Russell 2000 Index /zigman2/quotes/210598147/delayed RUT +2.17% /zigman2/quotes/209961116/composite IWM +2.23% or the NASDAQ Composite /zigman2/quotes/210598365/realtime COMP +2.68% are the ones that have terrible breadth and are finding it hard to post even small gains while SPX plows ahead.
We’ve seen these divergences several times in this past year – especially since June – and it has only caused small corrections in stock prices. Hence, there may be nothing to worry about, but it historically has not been a great idea when the “generals” are out in front of the “army.”