Major U.S. stock-market indexes are trading near record levels, but does that statistic simply mask an ominous picture that’s being painted behind the scenes?

Market breadth, a measure of how many stocks are rising versus the number that are dropping, has turned “exceedingly negative,” according to Brad Lamensdorf, a portfolio manager at Ranger Alternative Management. Lamensdorf writes the Lamensdorf Market Timing Report newsletter and runs the AdvisorShares Ranger Equity Bear ETF HDGE, +1.62% , an exchange-traded fund that “shorts” stocks, or bets that they will fall.

“As the indexes continue to produce a series of higher highs, subsurface conditions are painting an entirely different picture,” Lamensdorf wrote in the latest edition of the newsletter. He noted that the year-to-date advance in equities — the S&P 500 SPX, -1.11% is up 10.6% in 2017 — has been driven by outsize gains in some of the market’s biggest names.

Most notably, the so-called FAANG stocks, which refers to a quintet of technology and internet names, have by themselves contributed more than 28% of the benchmark index’s gain. Separately, megacap names like Boeing Co. BA, -3.81% and Johnson & Johnson JNJ, +1.36% have also outperformed the broader market.

“The good performance of these large companies is masking the fact that many stocks, including REITs and those in the retail sector, have already entered bear-market territory,” Lamensdorf wrote, referring to real estate investment trusts.

According to an analysis of FactSet data, 79 components of the S&P 500 are trading at least 20% below their 52-week high; a bear market is typically defined as a 20% drop from a peak. However, more than half the components are in what could be deemed bull market territory — at least 20% above their 52-week low.

Lamensdorf also cited a measure that compares market volume on advancing days to volume on days when the major indexes decline. This is a volatile metric, one that has both spikes and pronounced dips. However, since mid-2016, the spikes have topped out at progressively smaller highs. “This situation has occurred while the indexes have simultaneously hit higher highs; a classic negative divergence illustrating that large institutional sponsorship has not been following the indexes,” he wrote.

Separately, a read on market supply and demand from Ned Davis Research has shown weakening demand for stocks, despite major indexes continuing to grind higher, while the supply metric has started to rise. Rising supply and lower demand could indicate waning enthusiasm for equities at current levels.

There have been other signs of worsening technicals. Currently, 60.4% of S&P 500 components are above their 50-day moving average, considered a positive sign for short-term momentum. In mid-July, nearly 75% were, according to StockCharts. For the Nasdaq Composite Index COMP, -1.07% , only 47.3% of components are above their 50-day, compared with 67% in late July, a dramatic swing lower.

Recently, nearly 6% of New York Stock Exchange- and Nasdaq-listed securities hit a 52-week low on a day when the S&P 500 ended at a record, according to data from Sentimentrader that was cited by Lamensdorf, who called this “an alarming percentage.”

He added that it was the second-highest level going back as far as 1965, and that “Similar spikes occurred in 1973 and 1999, both directly preceding significant corrections.”