A couple of weeks ago the Nasdaq assumed the leadership position for the major market indexes. Indeed, I said as much in, Is There A New Index Leader?.
Fast forward a couple of weeks, and we see that Nasdaq's out performance may be coming to an end. If you look at the ratio of the Nasdaq to the Dow Jones Industrial Average using the ETF doppelgangers QQQ and DIA, you can see that the ratio leveled out this week. The Relative Strength Index (RSI) of the ratio has been overbought, which means that it may be ready for another leg higher.
More Pullback
But the Moving Average Convergence Divergence indicator (MACD) is at a very high level on the signal line with a histogram that is pulling back. Which suggests that more pullback is in the cards. Not a sign of panic -- yet -- but if you have been playing the Nasdaq against the Dow, it may be time to take some profits. Maybe buy some burgers, dogs and beer and celebrate the long holiday weekend.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Nasdaq's Dominance May Be Waning
Published 08/30/2013, 11:00 AM
Updated 05/14/2017, 06:45 AM
Nasdaq's Dominance May Be Waning
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