I’ve showed this chart either here or on Twitter and StockTwits over the past few weeks because it continues to weaken.  It is the ratio between the S&P 500 Equal Weight Index (SPXEW) and the S&P 500 Index (SPX). When it falls it signals that smaller stocks are under performing large cap stocks and can warn that market participants are rotating to safety. Today it fell below its 20 week moving average which usually results in a choppy period for the market in the following weeks. If it’s still there at the close on Friday it will be another warning.

As a side note, this indicator is currently moving in the opposite direction of many of our core indicators. They are mostly rising sharply this week.