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Lawrence G. McMillan

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July 29, 2021, 10:59 a.m. EDT

This eye-catching divergence in the stock market is a warning against complacency

By Lawrence G. McMillan

The S&P 500 index is performing at a far different rate than the “average” stock. This has been going on for a while and is not necessarily a bull market “killer,” but it is certainly not the healthiest of environments.

The S&P /zigman2/quotes/210599714/realtime SPX +0.15% , the NASDAQ-100 /zigman2/quotes/210598364/realtime NDX +0.09% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.10% are all at or near all-time highs. But the Russell 2000 RUT /zigman2/quotes/210598147/delayed RUT -0.49% is lagging behind, reflective of the poor internal strength of the overall market. The internal measurements show fairly heavy put buying, poor breadth on many days, and even more new 52-week lows than new highs.

What is propelling SPX and the narrow-based indexes is a relatively small number of large-cap tech stocks.

/zigman2/quotes/210599714/realtime
US : S&P US
4,455.48
+6.50 +0.15%
Volume: 1.69B
Sept. 24, 2021 5:05p
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/zigman2/quotes/210598364/realtime
US : U.S.: Nasdaq
15,329.68
+13.10 +0.09%
Volume: 419,225
Sept. 24, 2021 5:16p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,798.00
+33.18 +0.10%
Volume: 256.58M
Sept. 24, 2021 5:05p
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/zigman2/quotes/210598147/delayed
US : US Composite
2,248.07
-10.97 -0.49%
Volume: 0.00
Sept. 24, 2021 7:11p
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