According to financial news app CnFol, last week, as large technology stocks rose while other market stocks lagged behind, the performance gap between the S&P 500 index and its equal weight stocks reached a significant new extreme.

According to data from Dow Jones Market Data, since 1990, the performance of the traditional market value-weighted S&P 500 index has exceeded the S&P 500 equal weight index by 2 percentage points or more for two consecutive weeks for the first time.

But this is not the only milestone that suggests the growing divergence between these two indices, as analysts use them as a rough measure for market breadth.

According to Jonathan Krinsky, Chief Market Technician at BTIG, the S&P 500 index's relative strength index (RSI) surpassed 70 on Thursday, while the RSI of the S&P equal weight index fell below 50 for the first time since 1990. This situation occurred again on Friday.

Krinsky explained that there is a big difference between these two momentum indicators. RSI is a momentum indicator used by many technical analysts, and a reading above 70 indicates that an index or security is overbought, while a reading below 50 indicates that it is oversold.

These two indicators seem to be moving in different directions, which is the latest sign of the degree of differentiation in the US market.

In addition, the proportion of S&P 500 index members trading above the 50-day moving average has dropped below 50%, while the index itself continues to trade above the mid-term average line, up more than 4%.

Krinsky pointed out that this situation has not occurred since the months before the burst of the tech bubble in December 1999. For most of the past year, the 'bad breadth' of the US stock market has been widely discussed by investment professionals.

However, last week, analysts' discussions about the narrowness of the market seemed to have reached a fever pitch. Many people cited various indicators to show that the differentiation beneath the surface of the S&P 500 index has reached a new extreme, as only a few stocks, mainly Nvidia (NVDA.US) and Apple (AAPL.US), have risen recently. According to FactSet data, the S&P 500 index set historic highs for four out of five days last week.

An analyst team at Bespoke Investment Group stressed on Monday that the S&P 500 index no longer seems to reflect the performance of its ordinary member stocks.

The cumulative rise and fall line of the index last year failed to reach a new high with this year's index. On the contrary, the gap between the number of rising and falling stocks on the S&P 500 index continued to widen. The number of stocks that hit 52-week lows on the S&P 500 index last week was also higher than the number of stocks that hit 52-week highs.

Finally, although the S&P 500 index is still firmly in the overbought zone, the overbought amplitude of the technology sector in the S&P 500 index is greater. Therefore, the gap between the 50-day moving averages of the two widened to its highest level last year.

However, even within the technology sector, the recent wide-range fluctuations have worsened, indicating that the influence of a few super large-cap stocks is becoming increasingly important. Recently, less than 65% of companies in the sector had their stock prices trading above their 50-day moving averages, far below the level at the beginning of the year.