Watching the QQQs and SPY
This morning, Doug Kass referred to a chart laid out by "Fast Money's" Steve Cortes, which looked at the outperformance of the PowerShares QQQ (QQQ) and SPDR S&P 500 ETF Trust (SPY) over the last year. Doug's reference to this chart doesn't surprise me, as fellow contributor Bob Byrne has been pointing out the current lows we are seeing. I think Steve is dead on, although I don't find the double-top as troubling as either he or Doug does.
What I do find troubling is the current channel. The bullish channel that began back in 2009 for technology is dangerously close to breaking down. Failure here would lead me to conclude that the QQQ will underperform the SPY by at least 5% and as much as 10% in 2013 and possibly into early 2014. The setup is already being defined by the bearish divergence in the relative strength index (RSI) and stochastics which have been losing momentum for months now....178 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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