Threw together some drawings on the MGK chart, but the same pattern can be seen on AMEX:SPY AMEX:VTI or other big indexes. I feel like the failure of NVDA to push higher on a very positive earnings report is sort of the canary in the coal mine here. Everyone knows about the inverted yield curve and how attractive interest rates are. Why Gamble on stocks at...
Short of a miracle, it sure looks to me as if the mega cap stocks that fueled this 2 year rally have lost their fuel and are head down, and possibly in a big way this year. The trading channels are very clear for this ETF. You can see where they lost the steeper bull channel, retested it, and now has lost it (likely for good).
1W
1D
4h
One of the most important, yet consistently underappreciated, aspects of technical analysis is the concept of relative strength.
As a portfolio manager, one must be held accountable to some type of benchmark. And thus, if we want to outperform said benchmark, we most own things that are outperforming the benchmark! Participating in trends and capturing...
This a chart comparing apples to oranges, essentially. One is MGK, a megacap ETF and the other is an equal weighted ETF based on the entire S&P500. The Nasdaq is getting bitchslapped today and this is the reason - it's very top heavy because of the organizational weighting of the index itself. I'm not entirely sure what this has in store but it's worth watching...
I speculated yesterday that it is to be seen if yesterdays squeeze-like move can be sustained. Well, at least under the hood of the market it it seems like it can't. Mega Caps get sold after they moved higher yesterday post-FOMC, while the broad basket gets bid up. Similar situation over at the FI complex: Yields come down as we speak as if the FOMC never happened.
$MGK has had a great run higher doubling in value from the lows. This move higher did get quite overextended creating an overshoot on the highs. When a market blows through a level (in this case the channel highs) and overshoots it, the response is very important. In this case, the response was immediate bear pressure which caused the bulls to fail hard. Now that...
