Week 29 Market Roundup — rotation from NASDAQ into DOW, RUSSELL 2000 & S&P 500

“Watch out for NASDAQ climatic run up” as mentioned in my Week 28 market roundup, subsequently we have seen correction right on the Monday’s key reversal bar with the price spread of more than 4% with spike of supply signature. Refer the chart below for a comparison of Week 28 NASDAQ vs Week 29 NASDAQ.

The important question here is are we in a market top yet?

If you follow my daily market analysis video series, you probably remember I pay attention to NASDAQ in case this leader will be the one to lead the market on the way down.

So, what happen to the DOW, S&P 500 and the RUSSELL 2000? Let’s take a look below the 4 indices for a comparison.

As we can see that NASDAQ (the bottom right) has been a laggard compared to the other 3 indices in the past 4 trading session, with increasing volume. This could suggest profit taking from NASDAQ after significant out-performance since the bottom formed in Mar 2020. Fund rotation out from the NASDAQ seems to be deployed into RUSSELL 2000, DOW and the S&P 500, as reflected in the stronger structure highlighted in the blue box.