Sideways Market
6 weeks flat
Over the past six weeks, the QQQ has emerged as the leading index, displaying resilience in the face of market fluctuations. However, if we zoom out the QQQ has been relatively stagnant during this period. Looking at the weekly chart, we see many tight closes, marked by blue circles. Five out of the past six weeks have had these tight weekly closes of less than 1.5%.
This stability of the QQQ can be attributed to the strength exhibited by mega-cap companies within the index and their heavy weightings. However, a different picture is painted when we look at the QQQJ or the IWM. Both appear much weaker and are below all of their key moving averages.
Another key element we are missing is market breadth, particularly in net new highs / lows. New lows are significantly outpacing new highs, unlike we saw in the January rally. This poor breadth underscores the need for a change in market dynamics for a sustained rally to materialize.
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There are a handful of names however that are showing power from strong earnings. I cover those names and more in the video below.
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The content presented is for informational and educational purposes only. Nothing contained in this newsletter should be construed as financial advice or a recommendation to buy or sell any security. Please do your own due diligence or contact a licensed financial advisor as participating in the financial markets involves risk.