The Red Flag That Presaged Dot-Com Crash And The Great Recession Is Back

It is hard to make quantifiable observations without having a strong anchor point. Beneath the surface of a fresh market all-time high, the foundation is looking increasingly shaky. Market breadth, a measure of stocks participating in a rally, has slipped below the level it had in 2008, a year that holds a special place in all economic textbooks.

Equal-Weight At Lows

Start with the ratio of the Invesco S&P 500 Equal Weight ETF(NYSE:RSP)  to the traditional market-cap-weighted index, SPDR S&P 500 (NYSE:SPY). It just dropped to 0.292, its lowest point since November 2008. To put that in a recent context, at the 2022 bear market low, the ratio stood about 15% higher.