Small-caps should be favored over QQQ; Banks might also stabilize Array ( [cookie] => 38bc7a-aa3424-337639-f96d2b-e9393b [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 207711 [user_id] => [reason] => [method] => ) 1 and can accesss
SPX and QQQ have shown greater than average weakness following the break of support this week. Interestingly enough, some minor stabilization and outperformance occurred Thursday in some of the formerly hardest hit sectors which might bring about some mean reversion higher into November. Trends, momentum and breadth remain bearish and pointed lower; However, sentiment likely will start to reflect more evidence of fear into end of month on this ongoing selloff. Overall, given widespread technical damage in many sectors it’s going to be important to see more evidence of a rolling over in both US Dollar and Treasury yields to have confidence of an imminent rebound.
A couple of interesting developments happened Thursday, as better than expected GDP data failed to lead rates higher. Whether or not US Yields were simply following European yields given ECB’s pause or paying attention to Core PCE data, this brought about a further uncoupling of recent correlation trends between SPX and Treasuries and seems important.
Meanwhile, some faint but important signs of markets selling off on lesser intensity happened on Thursday, which might not have been immediately recognizable to those who are watching end-of-day results only from SPX and QQQ. However, nearly half the sectors were positive on Thursday’s session and some interesting strength out of both Banks and also Small-caps that is worth paying attention to.


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