Cool!
QQQQ gained 1% this week, which was its second consecutive weekly close in the green. Meanwhile the S&P 500 dropped 1.5%, which broke a three-week winning streak, and the DJIA lost 2.0%.
QQQQ:
stockcharts.com[h,a]waclyyay[dd][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
S&P:
stockcharts.com[h,a]waclyyay[dd][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
Dow:
stockcharts.com[h,a]waclyyay[dd][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
Russell 2000:
stockcharts.com[h,a]waclyyay[dd][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
So, as we have seen before, we are seeing evidence of rotation here. The financials did not participate in today's rally, and the blue chips did not also. Mostly this was a tech-led rally.
I think we'll see these other extremely important sectors jump in next week to some degree, and that will add significant fuel to this rally.
But note that QQQQ will shift from periods where it outperforms the S&P to periods where it underperforms, as you can see in the following chart. This is a 2-year weekly chart of the ratio of QQQQ prices to $SPX prices:
stockcharts.com[h,a]waclyyay[de][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
I think you can see from the above chart that QQQQ has entered into a phase where it will lead the markets, and technology and the semiconductors are the spearheads.
The chart of the semiconductors looks bullish now, and the $SOX should rally to $450. So I think the rally in QQQQ will be a strong one in the coming weeks and months.
stockcharts.com[h,a]waclyyay[de][pd20,2!b10][vc60][iLg!Lp14,3,3]&pref=G
Again, we will finish this year at least 20% higher than current levels, and I would not be surprised one bit to see QQQQ perform significantly better than that even, and $50 is not at all inconceivable IMHO, provided the $SOX continues to participate.
T |
