The following chart is a performance ratio of the Nasdaq (QQQ ETF) compared to the S&P 500.
When the black line is rising, it indicates the Nasdaq is outperforming the S&P 500. Conversely, when the black line is falling, the S&P is outperforming the Nasdaq.
This is an excellent way to gauge Wall Street’s ‘risk appetite’.
Two exogenous dataset composites are overlaid.
Both are pointing to how the performance of the Nasdaq (and the QQQ ETF) performance should behave over the coming months.
For those wishing to take advantage of QQQ’s outperformance of the stock market, the next ‘go long’ date is marked on the chart.
Chart expands upon click.