The market has moved into an odd dichotomy.
On one hand, the mega-cap stocks in the Dow Jones Industrial Average (where the average market capitalization is $126 billion) just pushed to a new all-time closing high.
But the rest of the market remains in the doldrums.
Consider that the Russell 2000 small caps (where the average market capitalization is $594 million) remains roughly 6% off of its all-time high. Moreover, the index continues to repeatedly test its 200-day moving average to the downside (five times over the past month), a critical support level that it hasn’t closed below since 2012.
Or consider that, as the Dow Jones Industrial Average pushes to a new all-time high today, just 67% of the stocks in the S&P 500 are in uptrends vs. nearly 84% when the Dow last closed at a new all-time high at the end of 2013. Or that the last time the Dow hit an intra-day high earlier this month the percentage of NYSE stocks above their 50-day moving average was around 77% vs. just 59% now.
To my eyes, it looks like a growing swath of the markets — despite the Dow’s push higher — is coming under increasingly aggressive selling pressure. It started with big tech and biotech in March, but is now spreading to other areas, including financial stocks. The Financial SPDR (XLF) is some 3% below its high.
Here is a closer look at five bank stocks that are coming under pressure.