The stock market has jumped to new records in the months since Republican Donald Trump was elected president on a pro-business platform, but there are worrying signs that the rally is running out of steam.

David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., identifies five indicators that show fewer stocks are participating in the rally, according to a May 31 research report obtained by Newsmax Finance.

That narrow breadth means disappointing results from an e-commerce company like Amazon.com, which has risen 40 percent in the past 12 months, could take down a market index like the S&P 500 or the Nasdaq Composite.

David Rosenberg’s 5 Signs of Deteriorating Market Breadth

1. NYSE Advance-Decline Line: The NYSE cumulative advance-decline line, which compares the number of rising stocks with falling stocks, has shown little improvement since mid-December, Rosenberg said.
2. NYSE Stocks Closing Above 200-Day Moving Average: The 200-day moving average indicates longer-term trends for a stock’s price. A stock trading below that average points to a downward trend. “The share of NYSE stocks closing above their 200-day moving average has fallen from a nearby peak of 72 percent on February 27 to 58 percent currently,” Rosenberg said.
3. Equal-Weighted S&P 500 Index: This benchmark gives each stock the same weighting in calculating the index, to lessen the effect of a handful of companies on the broader market’s value. Rosenberg said the equal-weighted index isn’t performing as well as the S&P 500 index that is weighted by the market value of individual stocks.
4. Small-Caps Are Lagging: Companies with a valuation of less than $2 billion are more sensitive to changes in the economy because their smaller balance sheets make them more vulnerable to recession. Small-caps, which are typically measured by the Russell 2000 index, act as an early indicator of market direction and broader economic strength. “The small-caps are lagging the large-caps, with nearly all of their post-election outperformance erased,” Rosenberg said.
5. Over-Reliance on ‘FAANG’ Stocks: FAANG is short-hand for Facebook, Amazon.com, Apple, Netflix and Google. These five companies make up more than 11 percent of the S&P 500’s total value. That means market direction is very dependent on these five stocks.

Rosenberg said it’s good to remember one of the anecdotes of Robert Farrell, who was Merrill Lynch’s chief stock market analyst for 25 years: “Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.”

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