Narrow leadership and day-to-day rotations among different groups in the stock market suggest that recent record highs on Wall Street could prove to be hollow, according to technical strategists. The S & P 500 and Nasdaq Composite have rallied during the second quarter and are currently within 1% of their record highs. But a closer look suggests that investors are running out of risk appetite. Wolfe Research strategist Rob Ginsberg pointed out that small-cap stocks and bitcoin have both been falling in recent days, arguably a risk-off signal. IWM 1M mountain Small-cap stocks are sliding, as shown by this Russell 2000 ETF. “It’s great to see S & P and Nasdaq make new highs, but clearly something is not right if key barometers for risk are rolling over,” Ginsberg wrote. There doesn’t even seem to be a consensus among the biggest names in the stock market. Nvidia , Microsoft and Apple have all risen in just three of the past six trading sessions, with different combinations of up-and-down days. “[S & P 500] and [Nasdaq Composite] reminds us of the kids game ‘whac-a-mole’, in that whenever one mega-cap name goes down, another one pops up and that continues to keep volatility suppressed and the index grinding higher,” BTIG strategist Jonathan Krinsky said. These latest signs of weakness are part of the long-standing worry about the lack of market breadth . The excitement around artificial intelligence in particular has boosted megacap tech stocks, but smaller companies and those unrelated to AI have struggled. For example, the Invesco S & P 500 Equal Weight ETF (RSP) is down more than 3% in the second quarter, while the regular S & P 500 — which is weighted by the market capitalization of each company and therefore heavily affected by Big Tech stocks — is up over 4%. RSP YTD mountain The equal-weight S & P 500 is headed for a losing second quarter. “The equal-weight RSP is now below its 50[-day moving average], and still ~4% below its YTD high. Bears have been unable to get any downside rotation because of mega-caps, but we remain concerned given that concentration risk and the complacency,” Krinsky said. — Tech Zone Daily’s Michael Bloom contributed reporting.