The SPDR S&P 500 ETF (SPY) has a Neutral Chaikin Power Gauge ETF Rating and continues to outperform the broader IWV (Russell 3000 ETF) though the relative performance has waned over the past two days. The OB / OS Indicator is moving lower and has room to oversold levels. Chaikin Money Flow is bullish and SPY is below the declining long-term trend line.
Yesterday, the fund pushed toward the 61.8% retracement level and then faded throughout the day. SPY remains in the resistance zone between $280 and $293. On the downside, there is support near $275. Below that the zone between $245 and $260 becomes important.
The iShares Russell 2000 ETF (IWM) has a Neutral Chaikin Power Gauge ETF rating and continues to underperform the SPY but has shown improvement over the past two days. Our OB / OS Indicator is moving higher after failing to reach an oversold position and Chaikin Money Flow is bullish. IWM is below the declining long-term trend line and has a bearish Power Bar Ratio.
On the upside, the key retracement levels for IWM are $133 (50%) and $141 (61.8%). Should the fund begin to fade from current levels, the first area of support is in the $110 – $113 range.
The Invesco QQQ ETF (QQQ) has a Very BullishPower Gauge ETF Rating and is leading the SPY as it has been doing since October. The OB / OS Indicator is moving lower but has yet to hit oversold levels and Chaikin Money Flow is bullish. Resistance is in the area between $210 and $220 while support is in the area between $185 and $195.
Take-Away: Early gains gave way to afternoon selling yesterday for the equity market but one theme that is in early stages is the strength in small caps on a relative basis at the expense of large growth stocks. Small caps have been lagging since the start of the year but we are mindful of potential trend changes. Last night after the close, GOOGL traded well on the heels of their earnings announcement and this week we will hear from other large cap growth leaders such as AAPL, MSFT and AMZN. These reports will go a long way in determining if leadership in the market is beginning to turn.