The 40% bubble concentration rule just triggered for the first time since the dot-com crash.
If history repeats, the entire market could be at risk.
Every time the top 10 stocks have made up 40% or more of the total market, a major crash has followed soon after. This pattern holds across nearly 200 years of market history.
In 1929, the top 10 stocks hit 44% of the market. The Great Crash followed.
In 1965, they hit 40%. The "Go-Go Bubble" burst followed.
In 2000, they hit 41%. The dot-com crash followed.
Today, the top 10 stocks make up 40% of the market once again. Apple, Microsoft, Amazon, NVDA, and Google alone make up 25%.
This level of concentration has only been seen at the peak of the largest bubbles in history. And each time, the entire market has suffered, not just the top stocks.
In 2000, while the Nasdaq lost 80%, the S&P 500 still fell 50%. In 2008, while banks led the plunge, the S&P 500 fell 58%. When the top gets this heavy, it drags everything down with it.
40% concentration has been a clear and consistent red flag. It doesn't mean a crash will happen tomorrow. But it does mean the risk level in the market is at an extreme.
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