The over valued growth area known as the Cloud (w/ SaaS software and all that remote collaboration stuff) has been a leader out of the March crash, leading broad Tech (NDX, QQQ), which itself is a leader. This has served me well in that time, but yesterday the CLOU (an ETF I have never owned, but used here for illustration)/QQQ ratio reversed and today it’s getting hammered. If it were a stock chart it would be at short-term support.
Of more big picture importance, NDX has steadily led SPX and today this ratio too is getting hammered. But it’s on trend, no? So it’s not broken.
What I think is going on is that the reflationary garbage is finally taking a bid (watch out you Pigs*, the 10yr yield just reversed) in what could be an ending phase of the great stock market sentiment rally. That’s just me guessing. Other options are in play, obviously. But as to the above, it is interesting that two leaders are bending but not yet broken.
* Pigs = Banks/Financials
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