The ratio of big Tech (QQQ) to the broader market (SPY) is in danger of making a secular top
The log scale monthly chart (displaying percentage changes) shows a channel breakdown of a leader that held sway since 2006 as big Tech (QQQ) vs. SPY drops from the channel to test lateral support. If that area breaks down it’s not going to be pretty in 2023.
The linear scale monthly chart (an absolute view with equally spaced values between price levels) shows a fledgling channel break after the big excess to the upside.
As a side note, we’ve been managing the topping of the US dollar (at least on an interim basis) over the last several months in NFTRH and one chart used was this one showing USD topping out at the underside of the 2000-2002 topping pattern. Interestingly, QQQ/SPY appears to be doing the same thing. It’s just that the ratio got a head start on Uncle Buck.
Here’s the monthly chart (including the Gold/Silver ratio, which we use for various reasons to correlate with USD) showing the US dollar’s more recent top at the underside of that 2 decades ago pattern.
I don’t know why QQQ/SPY may be related to the USD. Maybe it’s just a coincidence that each rose to the 2000 time frame pattern resistance before declining. Maybe you have some idea. I am just a…
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