According to Zhitong Finance, behind the continuous record highs in the US stock market, there is a trend that worries Wall Street strategists: the number of stocks supporting the market's rise is decreasing. For the ninth consecutive day, the number of declining constituent stocks in the S&P 500 Index has exceeded the number of rising ones, marking the longest such streak since data collection began in 2004.

This situation indicates that the foundation for the rebound in US stocks is weakening, as the soaring technology stocks strongly offset the weakness in other shares. While a top-heavy market is not something new, a 27% rise in the stock market this year only intensifies worries that valuations appear too high and positions have increased.

Strategists at SentimentTrader describe this phenomenon as the 'early cracks' in a 'long-term, strong' bull market for US stocks. They wrote in a report to clients: 'Investors have begun to hesitate.'

The S&P 500 Equal Weight Index fell 0.4% on Thursday, resuming its downward trend. As of Tuesday, the index has fallen for seven consecutive days, marking its longest losing streak since 2018. Meanwhile, in the past 10 days, the seven major tech stocks, including Alphabet (GOOGL.US), Microsoft (MSFT.US), and NVIDIA (NVDA.US), saw gains on 8 days due to renewed optimism in all areas of AI.

Craig Basinger, Chief Market Strategist at Purpose Investments, wrote in a report on December 9 that 'while the market reaches new highs, breadth is deteriorating rapidly.' He pointed out that the number of stocks trading above key support lines in the US benchmark stock index is decreasing.

Currently, less than half of the S&P 500 Index constituent stocks are trading above the 50-day moving average, only 34% are above the 20-day moving average, and just 25% are above the 10-day moving average. This means that among the major global indices, the S&P 500 Index has the lowest proportion of its constituent stocks trading above the 10-day and 20-day moving averages, except for South Korea, which has yet to recover from the impact of a brief imposition of martial law.

Lawrence McMillan, president and founder of McMillan Analysis, stated in a report released on December 6: "The breadth of the market has been poor and is on the verge of producing a Sell signal." He said that if a Sell signal does indeed occur, it would mark the first confirmed Sell signal among the indicators his company focuses on.

However, this may depend on which moving average people consider to be the most important. Bloomberg Analyst Gillian Wolff believes that the concentrated nature of the S&P 500 Index's rise has been largely within this Range for the year. She pointed out that the proportion of components in the S&P 500 Index with prices above the 200-day moving average hovers around 73%, within the 70% to 80% Range observed this year.