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QQQ & US Equity Market Outlook (video)

This video takes an in-depth look at the US equity markets with a primary focus on the recent technical developments & outlook for the Nasdaq 100 (via QQQ).

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Apr 27, 2016 3:17pm|Categories: Equity Market Analysis, Unofficial Short Ideas|Tags: , |9 Comments

9 Comments

  1. pangblood April 27, 2016 3:34 pm at 3:34 pm

    Randy, do you have any thoughts as to why IWM is holding up so much? isn’t the norm for IWM to have larger swings than QQQ and SPY? Does this make it a better (or worse) candidate for shorting?

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    • rsotc April 28, 2016 8:28 am at 8:28 am

      pangblood- Personally, I am also short IWM & believe that as it has (so far) held up recently, as a higher beta index (vs. the SPX), it will likely fall more than the broad market if my expectation for a correction in US equities plays out.

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  2. jameske April 27, 2016 4:22 pm at 4:22 pm

    I am guessing here. Perhaps a difference in the weighting of its components. If the Qs are significantly heavier in some stocks rather than others then bad news from the higher weighted companies cause a different reaction than IWM if it is more equally weighted. Conversely one might expect the best companies to hold up the Qs longer if in tighter market conditions. Though could just be random and it will self correct in the long run.

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    • Omdavis21 April 27, 2016 8:41 pm at 8:41 pm

      I think that’s a plausible scenario. looks to me like the leaders from the last market may not be the leaders of this market.

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    • rsotc April 28, 2016 8:36 am at 8:36 am

      A couple of thing to note on that:
      1) IWM fell over 27% from its peak highs (mid 2015) while QQQ only dropped about 18% off its peak high put in back in early Nov & early Dec (double-top), hence, IWM had more catching up to do on this recent/previous rally.
      2) Also note that IWM, as strong as it seems lately, only retraced just shy of the key 61.8% Fibonacci retracement level from the move off the highs to the Feb lows while QQQ managed a considerable stronger 78.6% (also a key Fib level) retracement of the move down from its 2015 highs.
      Therefore, as strong as IWM might appear, it is still considerably more below its 2015 peak than QQQ & by nearly all metrics that I follow, still in a primary downtrend/bear market, having already well exceeded the conventional definition of a bear market (20%+ drop).

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  3. jameske April 27, 2016 4:25 pm at 4:25 pm

    None of that helps me trade any better at the moment. Short or long, short or Long? My logic circuits are going to break.

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  4. snp April 28, 2016 12:56 am at 12:56 am

    consider the cot reports. still more traders long iwm than any other index. smart money knows something we don’t.

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  5. snp April 28, 2016 2:34 am at 2:34 am

    also if we are in a sector rotation, smart money goes to work on the most underperformed sector if they are still bullish. iwm under its monthly 20 ma still so least overbought? I like the point above from jameske re the diversity of the index. whats the biggest stock in the Russell? pbyi. puma. see my post about 116 as a possible shorting level and why. larger time frames trump smaller ones and monthly says 116 ish.

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  6. dan123 April 28, 2016 11:19 am at 11:19 am

    Thank you Randy great recap

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