divergence

Fresh data about wages, spending, and credit conditions from banks, economists, and the Fed show the divergence widening this year.

For banks, whose financial results offer a window into business and consumer activity, that divergence isn’t new.

But while stocks without as much exposure to AI had, at one point, started to pick up the slack, the divergence between the market’s winners and losers has been growing again recently.

A negative Relative Strength Index divergence and weak market breadth suggest a potential 10% correction.

“A combination of extreme upside metrics, significant breadth divergences, and complacent sentiment is a very risky mix, in our view,” Krinsky said in a report shared with MarketWatch earlier this week.