US stock market leadership using SMH > QQQ > SPY
This is a chain I have generally liked to see intact over the years if I am going to be constructive on stocks. US stock market leadership is in this case represented by the Semiconductor > Tech > Broad chain. Semiconductors are a cyclical positive when leading (reference January 2013 when we noted positive Semiconductor Equipment book-to-bill ratios). Here is a 2015 post with the no longer available book-to-bill data at that time, showing a bullish situation. The semiconductor sector has proven to be an important forward guide in its stock market leadership signals.
Within the Semiconductor sector I like to see the Semi Equipment stocks leading the general sector and currently own AMAT stock (with an eye on a couple others). Semiconductor Equipment theoretically should lead within the cycle leading Semi sector because they are the companies that supply the tools and equipment for the manufacture of Semiconductor wafers and other devices/equipment used by Semiconductor manufacturers. With the CHIPS act ongoing, it seems a reasonable to expect some first moving in the equipment stocks.
Anyway, here is the shorter-term daily chart situation (long-term chart trends are also important to keep tabs on and those hold some interesting pictures currently) in US stock market leadership as represented by SMH>QQQ>SPY. SMH is trending up vs. QQQ since the Q4-Q1 rally began in October. QQQ/SPY took up short-term leadership to start the new year as Ma, Pa and a lot of algos dumped Tech at the end of 2022. SMH/SPY shows firm US stock market leadership since the start of the broad stock market (Q4-Q1) rally.
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