Stocks may be trading close to record highs, but the market looks far more fragile under the surface.
Among the signals: More stocks declining than rising, a greater number of 52-week lows than highs, and a drop in small-cap stocks.
Last week, the Dow Jones Industrial Average briefly hit an all-time high while the S&P 500 traded near a record set on Sept. 21. The broader market ended the week posting its worst performance since September, and exposed a troubling trend: The recent run-up is being led by just a few stocks.
"The healthiest markets occur when the uptrend is broad-based, which is not the situation in the present example," said Bruce Bittles, chief investment strategist at Baird.