According to Zhitong Finance, behind the continuous record highs in the U.S. stock market, there is a trend that worries Wall Street strategists: the number of stocks supporting the market's rise is decreasing. The number of declining stocks in the S&amp;P 500 index has exceeded the number of advancing stocks for the 9th consecutive day, marking the longest streak since data collection began in 2004.
This situation indicates that the foundation of the U.S. stock market rebound is weakening, with the strong surge in technology stocks offsetting the weakness of other stocks. While a top-heavy market is not new, the stock market has risen 27% this year, which only exacerbates concerns that valuations seem too high and positions have increased.
Strategists at SentimentTrader described this phenomenon as &#34;early cracks&#34; in the &#34;long-term, strong&#34; bull market of the U.S. stock market. They wrote in a report to clients: &#34;Investors have begun to hesitate.&#34;
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The equal-weighted S&amp;P 500 index fell 0.4% on Thursday, resuming its downward momentum. As of Tuesday, the index had fallen for seven consecutive days, the longest losing streak since 2018. Meanwhile, in the past 10 days, the seven giants index, including Alphabet (GOOGL.US), Microsoft (MSFT.US), and Nvidia (NVDA.US), has risen on 8 days, as market optimism about all areas of artificial intelligence has resurfaced.
Craig Basinger, Chief Market Strategist at Purpose Investments, wrote in a report on December 9: &#34;While the market is reaching new highs, the breadth is rapidly deteriorating.&#34; He pointed out that the number of stocks trading above key support lines in the U.S. benchmark stock index is decreasing.
Currently, less than half of the S&amp;P 500 index constituents are trading above the 50-day moving average, only 34% are above the 20-day moving average, and only 25% are above the 10-day moving average. This means that, among major global indices excluding South Korea, the proportion of S&amp;P 500 index constituents trading above the 10-day and 20-day moving averages is the lowest. The South Korean market has yet to recover from the impact of a brief imposition of martial law.
Lawrence McMillan, President and Founder of analysis firm McMillan Analysis, stated in a report released on December 6: &#34;The market breadth has been poor and is on the verge of generating sell signals.&#34; He said that if a sell signal does occur, it would mark the first confirmation of a sell signal among the indicators his company monitors.
However, this may depend on which moving average people consider most important. Bloomberg analyst Gillian Wolff believes that the concentrated nature of the S&amp;P 500 index's rise has been roughly within this range all year. She pointed out that the proportion of S&amp;P 500 index constituents trading above the 200-day moving average hovers around 73%, within the range of 70% to 80% seen this year

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Concerns about a concentrated rise in the U.S. stock market have emerged, as the number of stocks supporting the S&P 500's upward trend is gradually decreasing. For the ninth consecutive day, the number of declining stocks in the S&P 500 has exceeded that of advancing stocks, indicating a weakening foundation for the market rebound. Despite strong performance from technology stocks, the overall market breadth has deteriorated, leading investors to feel hesitant. The equal-weighted S&P 500 index fell by 0.4%, marking the longest consecutive decline since 2018

- The U.S. stock market is experiencing a concerning trend where fewer stocks are driving the market's gains, with the S&P 500 seeing more declining than advancing stocks for nine consecutive days.  
- This indicates a weakening foundation for the market rebound, as tech stocks' strong performance offsets broader weaknesses, raising concerns about overvaluation.  
- Analysts note that the breadth of the market is deteriorating, with a significant portion of S&P 500 stocks trading below key moving averages, suggesting potential sell signals may emerge.

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Is a crack appearing in the bull market? The rise of U.S. stocks is too concentrated, raising concerns of a "heavy head and light feet" situation re-emerging