Most of the attention lately has been on the index level. The S&P 500 is holding up and volatility has been staying contained. Underneath the surface, however, for those who are more active market-participants, something notable has changed.
The QQQ/SPY ratio has now broken the downtrend that’s been in place since the November 1st, 2025 high. That trend-line has defined Nasdaq underperformance for months. QQQ underperforming the S&P 500 is no longer intact.
When a multi-month relative trend breaks, it usually points to a robust shift in positioning. Not necessarily full risk-on, but at minimum, less of a need to hide in the more defensive parts of the index.
For the balance of 2026, the phase of the Nasdaq and QQQ underperforming the S&P 500 is likely behind us.
The current risk regime data, cycles, and internal signals give a much clearer read on whether this is just a short-term move, or the start of something more durable.
Free QQQ Timing Guide: