There’s a 67% chance stocks will suffer a bear market when this rare signal flashes — like it’s doing now

MarketWatch argues that the recent divergence between the Dow Jones Industrial Average and the Nasdaq Composite is a historically bearish signal for U.S. equities. Over the seven trading sessions through June 25, the Dow rose 0.5% while the Nasdaq fell 5.0%, a 5.5 percentage-point spread that the author says is rare and has often preceded major market tops. Based on historical data since 1971, similar Dow-Nasdaq divergences were followed by a bear market within three months 66.9% of the time, compared with a 24.8% long-run bear-market frequency. The piece frames the move as more than normal sector rotation and warns investors that the market is not currently “firing on all cylinders.” The market implication is a cautionary one: if the divergence persists, investors may want to reduce risk and consider hedges.