- QQQ starting to kick into gear and outperform SPX as Technology outperforms.
- Growth has broken out of 2-month downtrends vs Value which is a positive.
- SPX pullback of 20% into May 20th fits in near the average drawdowns of mid-term election years and of 20-, 60-year cycles, which were down 25-30%.
The recent outperformance in QQQ and Technology has not gone unnoticed, and likely continues into this month’s FOMC meeting before some necessary consolidation. Despite how choppy this market has felt lately, it remains higher by 7% in the last two weeks than the 5/20 intraday lows. Technology has been one of the largest leaders in performance on a rolling 5-day basis, with SPDR Select Sector ETFs like $XLK up by more than 3%, second best only to Consumer Discretionary. QQQ is now nearing the all-important former February lows near 318. Bottom-line, a bullish near-term view remains likely, expecting QQQ to rise to technical targets near 326 before some post FOMC weakness. The bottoming process for US stocks is definitely underway.
Growth turning up vs Value is noteworthyDon’t look now, but Growth looks to be breaking out vs. Value on recent Technology strength. While this will require...