QQQ as it relates to IWM is forming a cup with handle formation. QQQ reached levels against the IWM not seen since the Dot Com Bubble, then immediately bounced off finding heavy resistance. Big tech has suffered at the expense of small caps since that time. If the cup with handle pattern is valid, we would see a rotation out of small caps and back into big tech. This rotation may have started on 15 January 2021.
We may see the ratio fall further to the .618 Fib retracement and then rebound also which would give small caps a little more time to lead the market.
This idea is also supported by
which shows 5% more upside max for IWM before coming into heavy resistance.
We may see the ratio fall further to the .618 Fib retracement and then rebound also which would give small caps a little more time to lead the market.
This idea is also supported by
