This Indicator Could Be the S&P 500’s Canary in a Coal Mine

I spend a lot of time analyzing exchange-traded funds (ETFs) here. And while you might think that's because I've analyzed those securities individually for a long time (I have), the thing about ETF analysis is this: if you do enough of it, for enough years, you start to see patterns of behavior. And while they don't always immediately say "buy this" or "sell this," they do something I think is at least as important to traders and investors.

ETFs can help us figure out when early risk has a shot of becoming big risk. Which often leads to big losses. And I'm all about minimizing that.

So when I do my routine ETF chart perusing, going through hundreds here each week, this one does not stand out on its own. It is the SPDR S&P 500 Growth Portfolio ETF (SPYG), and it owns 150 of the stocks of the S&P 500 Index ($SPX) — the ones that are judged to have growth characteristics. Collectively, they sell for a hefty 26x trailing 12-month earnings.

I'll also note that SPDR S&P 500 Value Portfolio ETF (SPYV), the alter ego of SPYG, covers S&P 500 value stocks and includes more than 400 stocks. Some names cross over to both camps, growth and value. But the fact that there are nearly three times as many value stocks as growth stocks, and growth has led this market higher for years, makes SPYG a real benchmark to watch.

And while I watch it in this form — daily prices — I see nothing special. Not bullish, not especially bearish. But wait, there's more.

This chart below shows a trend brewing. It says that the growth segment of the S&P 500 is starting to lose steam. Not long ago, 70% of stocks in this index were above their 50-day averages. Now, that figure is under 45%.

Again, this is an early indicator. But it is the same one that fired in early 2025 and early 2026, before we saw declines in the broader S&P 500 of 20% and nearly 10%, respectively.

There's a treasure trove of information on Barchart that goes much deeper on this issue. Here, we see that even fewer stocks are above their 20-day and five-day averages. See how the figures from left to right are rising. That's an early sign that momentum is fading. Just as the summer slumber is ending for traders and investors.