Pretty interesting relationship between QQQ vs SPY.
QQQ/SPY started massively deviating from the long term trend around March 2020.
We've since reverted to the mean a bit, and are now potentially showing signs of a top, which would mean QQQ is set to underperform vs SPY.
Double top scenario:
-we get rejected off the 21-week EMA, then break down from the channel.
Head & Shoulders top scenario:
-we rally a little longer up to the resistance level of the channel but then get rejected, forming a downward sloping H&S.
It would make sense if we saw QQQ underperform and then revert to the long term trend. However, the RSI is showing that we are very oversold, so perhaps this rally has more room to go.
QQQ/SPY started massively deviating from the long term trend around March 2020.
We've since reverted to the mean a bit, and are now potentially showing signs of a top, which would mean QQQ is set to underperform vs SPY.
Double top scenario:
-we get rejected off the 21-week EMA, then break down from the channel.
Head & Shoulders top scenario:
-we rally a little longer up to the resistance level of the channel but then get rejected, forming a downward sloping H&S.
It would make sense if we saw QQQ underperform and then revert to the long term trend. However, the RSI is showing that we are very oversold, so perhaps this rally has more room to go.
Comment:
It seems like we got the double top scenario.