24 stocks = HALF the market

By Elliott Wave International

If you own an S&P 500 index fund, you own a piece of 500 companies. But you may be a lot less diversified than you think.

This chart comes from Elliott Wave International’s free report, The Most Dangerous Market in History? 18 Flashing Red Signals You Shouldn’t Ignore. Here’s what EWI’s analysts say about it:

“Narrow market breadth offers another sign of speculation, as investors crowd into a handful of winning stocks. This chart shows that just 5% of S&P 500 stocks account for more than 50% of the index’s total market capitalization. A handful of high-profile tech stocks are driving the market, creating the narrowest concentration in at least 35 years.”

Last week showed what that means in practice. On Thursday, November 5, a sell-off sent the S&P 500 down 4.36%, its worst day since April 2025. The Magnificent Seven lost $1 trillion in market value in that single session. Meanwhile, the equal-weighted S&P 500, a stand-in for the typical stock, had closed at a record the day before and ended the week roughly where it started.

Stocks have since bounced back. But the takeaway stands: when a handful of stocks carry this much weight, their moves become the market’s moves, in both directions.

Market concentration is one of 18 charts in the report. The others cover record valuations, margin debt, investor sentiment and even housing.

Read the Full Report Free: See All 18 Flashing Red Signals >>

Elliott Wave Case Study: India’s SENSEX

By Elliott Wave International

One strength of Elliott wave analysis is its ability to reveal key turning points — before the crowd catches on.

India’s Sensex in 2008 is a textbook case.

During the Great Financial Crisis, Elliott Wave International's Senior Analyst, Mark Galasiewski, identified a wave pattern that pointed to a major rally ahead — even as sentiment was deeply bearish.

Check out this excerpt from the November 2008 issue of EWI's Global Market Perspective:

“Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves 1 and 2, in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance.

If we have identified this ‘nested fractal’ relationship correctly, it means that Indian stocks are about to begin Primary wave 3 of the bull market that began in 2003.”

What Happened Next: The Sensex rallied almost nine-fold to its 2025 high.

Learn how to identify Elliott wave patterns and anticipate reversals in your charts. This handy FREE resource teaches you the Elliott Wave basics in 30 minutes >>

This article was syndicated by Elliott Wave International and was originally published under the headline Elliott Wave Case Study: India’s SENSEX. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.