Stocks just hit a record, but there's something about the rally that's making me nervous

The S&P 500 just posted its longest weekly winning streak since 2013, and we can count the number of things going right. We ended the week on a high note with some strong economic data; earnings growth continues to beat year-over-year numbers, and key leadership (the technology sector) continues to rally impressively.

But there is a problem lurking under the surface: The rally in recent weeks has become much narrower.

As strong as the technology-laden Nasdaq has proved, only 53 percent of its names are trading above their 200-day moving averages. The percentage of New York Stock Exchange-traded stocks above their 200-day moving averages has also rolled over since the beginning of the month.

Plus, we've seen the market's advance/decline line (sometimes referred to as the A/D line), begin rolling over in recent weeks. This does not mean that stocks are going to fall out of bed, but it certainly shows the "internals" of this rally are beginning to deteriorate.

In the near-term, the narrowing of the market is cause for concern, but we're also entering a period of time in which "performance fear" for investors can and does play a role in the market's activity. After all, even the biggest long-term bear on the institutional side of the business has to be "in the market" if it's rallying into year-end. No matter what they say, they all become at least somewhat short-term-oriented at the end of the year.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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