Caution! Bifurcated Stock Market

The U.S. stock market is bifurcated with tech stocks being the primary catalyst for the upward drive in equity prices. This chart (courtesy of Zacks) shows that there is a growing spread between the Nasdaq 100 and the S&P 500 (both market-cap weighted indices). When there is a lack of market breadth, that usually spells trouble.

The Nasdaq 100, as measured by the exchange-traded fund QQQ, is trading only a few percentage points below its all-time highs. Tech giants like Microsoft, Amazon, Facebook, Apple, Netflix, and Google are getting a kick upwards from this pandemic. However, the rest of the market is languishing; always a bad sign. History can certainly be the witness to that effect when the tech stocks precipitously declined in the dot-com crash of 2000.