When the S&P 500 index reaches new highs while a large number of stocks simultaneously hit 52-week lows, this divergence indicates a weak market driven by a few companies rather than broad-based strength, suggesting investors should exercise caution despite the index's positive performance.
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S&P 500 New Highs: Is the Market Actually Weak? #shortsAjouté :
What about the S&P 500? Well, that keeps hitting new highs and you guys say, "Brent, you were wrong. It's new highs, everything's great. You're you're you're wet blanket, you know, don't worry about it." I go, "Well, yeah, it may be hitting new highs, but also too, there's more a large number of unusually large number of stocks hitting new 52-week lows." And this is very important because what this means, I've talked about this before, you want a broad-based increase in the S&P 500. You know, 500 companies going up. Well, that's not happening. You have more companies on the low side hitting lows than the high sides. And it shows that we got a a weak market because it's just coming from a few. So, you got to be careful here when you invest in the S&P 500, even though it's done great, past performance is no guarantee of future results.
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