![The stock market has never been divided like this before, by one measure](https://news7g.com/wp-content/uploads/2024/06/107428069-1718214493939-Traders-Photo-MW-20240612-PRESS-7-780x470.jpg)
The divergence between the broader stock market and some of the big tech companies continues to reach new milestones. BTIG technical strategist Jonathan Krinsky said in a note to clients Sunday that the market-cap-weighted S&P 500 index is unusually ahead of its weighted version of the index. Equal numbers are measured by their respective relative strength index, or RSI, a measure of momentum. index. The regular S&P 500 closed with an RSI above 70 last week, while the equally weighted version ended with an RSI below 50 on the same day. “That is the first time in history (data from 1990) that this has happened. The last time we had those figures was July 1998 and July 21. The former marked a peak before falling -20% while the latter saw a slight decline to new highs, modest 3.6% decline, then continued uptrend,” Krinsky’s note said. RSI is a way to compare the average upward movements with the average downward movements of a stock. The RSI is measured on a scale of 0 to 100. A reading above 70 is considered a sign that a stock or index is overbought creation has made several technology stocks the dominant stocks in the S&P 500. In particular, Microsoft, Apple and Nvidia all have market capitalizations of over $3 trillion in the S&P 500 with equal weighting, each The average market capitalization in the index is close to Extra Space Storage’s $33 billion performance gap each other is also big. Over the past 12 months, the SPDR S&P 500 Trust (SPY) is up 23.5%, while the Invesco S&P 500 Equal Weight ETF (RSP) is just 10% higher. RSP Mountain 1Y Equally weighted measures of the S&P 500, like RSP, are underperforming the index itself. This disparity in size and performance has led to concerns about weak market breadth and whether that means the bull market is in a borrowing phase. “Bulls continue to look for breadth and to catch the leaders,” Krinsky said. While that’s always possible, we find it rarely behaves that way when the divergence is so deep and long lasting.”