This chart is the total stock market equal weighted average. Which looks at roughly 5,000 companies. As we can see there can be a significant deviation from the major market-cap weighted averages, as a result investors may have a skewed outlook on the
general state of the market and the economy. Major indices are heavily influenced by a small number of large companies or are intentionally composed of the highest performing companies.
Looking at the true average from a technical perspective may contain valuable insights about near term market moves which won't be conveyed in major averages.
Many investors are diversified into smaller, lower growth, safer companies that correlate more with the equal weighted average instead of the major indices.
