Breadth Indicators Flash Warning Signs Despite Rally

While the major indexes recovered this week, underlying breadth indicators tell a more concerning story. The percentage of NYSE stocks above their 200-day moving average has been declining even as the S&P 500 makes new highs — a classic divergence pattern.

This narrowing of leadership often precedes more significant corrections. It doesn't mean a crash is imminent, but it does suggest that risk management should be a priority.