This chart is a clear breakdown on the performance of the NASDAQ (QQQ ETF) (Tech/Growth Heavy Index ETF) relative to the performance of the S&P500 (SPY ETF).
The Chart is a simply relative performance calculation by taking QQQ ETF and dividing it by SPY ETF
How to read this chart:
If it's going up - Nasdaq outperforms the S&P500
If it's going down - Nasdaq underperforms the S&P500
We've seen several periods in the past where the QQQ ETF has outperformed the SPY ETF on weaker breadth from the Relative strength Index (RSI). As it moves higher, we've seen a bearish/negative divergence resulting in a period of underperformance from the QQQ ETF relative to the SPY ETF. The trend has lasted from a few months to few years but eventually the money has flowed back into tech/growth. Right now, we are in a very similar phase of underperformance from QQQ ETF as it continues to trail behind the SPY ETF and I expect this trend to reverse soon as the market gains more clarity on inflation, unemployment, and interest rates.
The Chart is a simply relative performance calculation by taking QQQ ETF and dividing it by SPY ETF
How to read this chart:
If it's going up - Nasdaq outperforms the S&P500
If it's going down - Nasdaq underperforms the S&P500
We've seen several periods in the past where the QQQ ETF has outperformed the SPY ETF on weaker breadth from the Relative strength Index (RSI). As it moves higher, we've seen a bearish/negative divergence resulting in a period of underperformance from the QQQ ETF relative to the SPY ETF. The trend has lasted from a few months to few years but eventually the money has flowed back into tech/growth. Right now, we are in a very similar phase of underperformance from QQQ ETF as it continues to trail behind the SPY ETF and I expect this trend to reverse soon as the market gains more clarity on inflation, unemployment, and interest rates.