Earlier this week, there were some dangerous signs underlying stocks' internal participation. Despite major indexes hitting new highs, some shorter-term breadth measures were showing rare and mostly troubling lags.
When stocks tumbled on Wednesday, the overwhelming number of declining issues pushed the McClellan Oscillator further below zero, to the point where it's already suggesting oversold conditions.
There was also a dramatic drop in the percentage of members in the S&P 500 holding above their 50-day moving averages. It plunged more than 20% on Wednesday alone, one of the largest single-day drops in medium-term trends in years. Even so, well over 75% of stocks are still holding long-term uptrends, trading above their 200-day moving averages.