Changing of the Guard? QQQ to Neutral While IWM Flips to a Bullish Rating - Chaikin Analytics

Changing of the Guard? QQQ to Neutral While IWM Flips to a Bullish Rating

The Invesco QQQ Trust (QQQ) has a Neutral Chaikin Power Gauge ETF Rating, down from Bullish, but continues to lead the SPY. In the near-term, the fund is overbought based on our indicator and Chaikin Money Flow is bullish. QQQ is above the rising long-term trend line and broke from a near-term consolidation on Friday. Support is in the zone between $265 and $270. As long as the break of $280 holds, there is room to the record highs.

Small Caps

The iShares Russell 2000 ETF (IWM) has a Bullish Chaikin Power Gauge ETF Rating, up from Neutral, and is outperforming the SPY. The OB / OS Indicator is moving higher in an overbought position and Chaikin Money Flow is bullish. The fund is above the long-term trend line and the Power Bar Ratio is bullish.

Support is in the area between $145 and $150 while resistance is in the $160 – $170 zone. This was the standout group last week as we highlighted in our notes. New highs for IWM would be a bullish breadth development for the overall equity Market.

Fixed Income 

The iShare 7 – 10 Year Treasury Bond ETF (IEF) has a Bearish Chaikin Power Gauge ETF Rating, down from Neutral, and is lagging the SPY. The OB / OS Indicator is moving lower in an oversold position. 

Support is in the $120 – $122 range while resistance is in the zone between $123 and $124. Treasuries have been weakening as VP Biden has been doing better in the polls and betting lines. Investors view a Biden win as a sign that stimulus and spending could be larger than what the market expects. This would have an inflationary effect which is a negative for low-yielding fixed income products.  

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