In One Chart: This stock-market canary has keeled over

A stock-market index of small caps is at its weakest versus the S&P 500 since the financial crisis, suggesting the market has a liquidity problem.

Although the three main U.S. stock indexes — the Dow Jones Industrial Average DJIA, +0.85% S&P 500 SPX, +0.23% and Nasdaq Composite index COMP, -0.08% — continue to climb to records, there are some early warnings that trouble lies beneath the surface of an otherwise run-of-the-mill ascent to fresh heights.

And while markets can sometimes defy logic and clamber ever higher, the following chart suggests investors’ appetite for assets considered risky, like stocks, has ebbed to levels not seen since the 2008-09 financial crisis:

FactSet, MarketWatch

One gauge of that is relative strength, which technical analysts use to gauge one asset’s performance in relation to another.

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