The three-month rolling correlation between the S&P 500 Index ($SPX) and its largest constituent stocks has plunged to the lowest level in at least 15 years. In plain English, that means the “stock market” is not reflecting what the majority of stocks are actually doing.
However, with so much money in the S&P 500 Index and ETFs like SPY, VOO and IVV, it begs the question: if the top-heavy index runs into trouble, can the other 450+ laggards pick up the slack?
