Analysis: Most US stocks are showing a fall, with the market experiencing extreme polarization.

On November 6, KobeissiLetter released a market analysis stating that we are witnessing extreme divergence in the U.S. stock market, with the 3-month average stock correlation of the S&P 500 index dropping to 0.13, close to the lowest level since 2018. This metric measures the movement of individual stocks in relation to the index. This means that the majority of stocks are moving independently rather than following the broader index. In contrast, during the market big dump in April, the average stock correlation was about 0.50. In short, the U.S. stock market has become very dispersed, with a few large market capitalization tech companies driving most of the rise, while the majority of stocks did not participate in this rally, exhibiting a pattern of falling without rising.