Stock market veterans love to say “the trend is your friend, until it ends.” And some investors worry that may come true soon even with Wall Street at record highs.
A shift has taken place beneath the stock market’s surface in recent months, and that means the all-time highs in stocks might be in jeopardy, analysts say.
Wall Street watchers point to this concern: Fewer stocks are part of the market rally, which is often viewed as a warning sign for investors.
What does that look like? Take, for example, that the percentage of NYSE common stocks trading above their 30-day moving averages dropped to 45% on July 2, down from 83% on May 7, according to Lowry Research, a technical advisory service.
That would suggest choppiness for stocks in the coming months, analysts say.
Will the stock market take a breather?:Here’s what the second half of 2021 could look like for your retirement investments
Stocks post record run under Biden: Here’s what could happen next
So does that mean for trouble for your nest egg?
Not necessarily. So don’t freak out just yet.
If anything, the stock market has remained resilient despite concerns about the economic effects of the spread of the Delta coronavirus variant and worries about how the Federal Reserve will react to rising inflation, analysts say.
So far, the S&P 500 has rallied 90% from the depths of its pandemic lows. Any weakness could present an opportunity to scoop up more stocks at lower prices, or you could at…