07/21/2023 | by Jason Krutzky

Market Update Into July 24th: Are There Cracks Forming?

BlogMarket CommentaryMarket Update Into July 24th: Are There Cracks Forming?

Markets continued their upward trajectory this week, with all three major indices making new highs relative to the previous weekly high. Though this is characteristically quite bullish, there are potentially some cracks forming in momentum, which does appear to be slowing in two of the three names. Could the rotation out of mega-cap tech into small-caps finally be underway? There are certainly signs pointing to it. Let’s dig into the individual names and see how the charts look!

Weekly Analysis

This week, the SPY ETF closed at $452.18 (+0.65%), but strength appears to be waning, as visualized in the momentum divergence. This index is now 17 weeks into its ‘Strong Go’ signal, and unusual options positioning currently appears to be quite bearish through the end of August.

This is an image of the weekly chart of the SPY index.

This week, the QQQ ETF closed at $375.63 (-0.91%), making it the weakest performer of the group and the only name to go red on the week. Momentum appears to be slowing, and unusual options positioning seems to be mixed into the end of August. Like the SPY, this index is also 17 weeks into its ‘Strong Go’ reading from the GoNoGo indicator.

This is an image of the weekly chart of the QQQ index.

This week, the IWM ETF closed at $194.46 (+1.53%), making it the strongest performer of the group. The GoNoGo indicator is flashing the first ‘Strong-Go’ signal seen since all-time highs just as the price is finding its way back to the 150-period SMA. Note the charts of the SPY and QQQ, which both turned to ‘Strong-Go’ as they crossed their respective 150-period SMA’s back in March of this year.

This is an image of the weekly chart of the IWM index.