Over the last four weeks (20 trading days), there have been seven days in which the S&P 500 has closed higher on the day, yet there were more stocks in the index that closed lower rather than higher. As shown below, since 1990, there have only been four other four-week stretches where we saw similarly weak breadth. The last time this type of action occurred was in August 2020. Back then as is the case now, the mega-caps were the only stocks rallying. But in late 2020, the mega-caps were rallying because of the narrative that they were going to be the main beneficiaries of the lockdown lifestyle caused by COVID. Just as quickly as that narrative shifted, they can change today.

As shown below, the S&P 500's price has been making new all-time highs while its cumulative A/D line (the cumulative number of daily advancers minus decliners over a specific time frame) has actually been falling. This has been one of the most extreme negative breadth divergences on record.

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