Despite the back and forth price volatility of late, and cracks in the foundation, bulls remain in control.
But there’s a growing likelihood that quarter end may bring a “times up”.
Time, Price, and technicals/market breadth measures are warning that the market may have a couple more weeks of rally left.
But there’s something else that’s been going on for a while – a key theme in the markets. Call it a divergence of sorts. Or call it a tale of two markets. Indexes like the Nasdaq and S&P 500 are grossly outperforming the NYSE Composite and Dow Jones Industrials. Digging further, S&P technology (XLK) is grossly outperforming financials, energy, airlines, and small caps. All of these are important to the economy… As per usual, I’ll just let the charts do the talking.
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Nasdaq Composite Chart
The recovery rally has produced new all-time highs for the Nasdaq and Nasdaq 100. No other major index can say that. The S&P 500 has performed well, while most other have sorely underperformed.
NYSE Composite Chart
This broad based index provides the best look at the divergence and tale of two markets. Just compare to the Nasdaq. As I wrote about in a few weeks back, the coronavirus has fast-forwarded the tech and tech-integrated services economy.
Twitter: @andrewnyquist
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
