# Market Divergence Warning

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Hey, Ross here:

The S&P 500 closed at another record high yesterday.

And yet, as today’s chart shows, market breadth has been pretty lackluster.

**Chart of the Day**

![](/wp-content/uploads/2024/02/image-4.png)

Over 50% of stocks are trading below their 50-day moving averages.

When we look at the 20-day moving average, we find over 55% of stocks trading below it.

Market breadth is unimpressive – yet the S&P 500 just keeps hitting record highs.

This divergence should make us cautious. Again, expect a short-term pullback in the broader market.

But there’s also a positive side to divergences – which I explain in the Insight of the Day.

**Insight of the Day**

**Because market leaders move ahead of the broader market, they create positive divergences that can be taken advantage of**.

To know where the market is going, look to the market leaders.

Yes, the broader market looks like it’s about to enter a healthy yet necessary pullback/consolidation.

But many market leaders are already reaching the end of that stage – and could be about to break out strongly.

This is a form of positive divergence – and it allows you to target big profits even when the market is about to run into a wall.

As for how to spot these fast-moving market leaders?

**[This video reveals the truth about what really turns ordinary stocks into market leaders – and how you can spot them.](https://pro.stealthmodeinvesting.com/?tambid=22882)**

![](/wp-content/uploads/2024/01/unnamed-12.png)

**Ross Givens**  
Editor, _Stock Surge Daily_