Over the past few weeks, the market has been rampant with fear and tech has been the one index giving bulls hope. With the close this week, we see a new picture forming. One in which the QQQ is showing negative divergence at new highs while the IWM is showing positive divergence at new lows. Is there a rotation setting up? Let’s dig into the individual names.
This week, the SPY ETF closed at $395.75 (+1.48%). finding support at the AVWAP from the October 2022 low as well as the 200-day SMA. Of interest is the hidden positive RSI divergence forming on the daily time frame. This could be suggesting strength under the hood.
This week, the QQQ ETF closed at $310.96 (+1.83%), trading up to new daily highs on Wednesday before consolidating into the week’s end. Of note is the bearish RSI divergence forming on the daily time frame which suggests the possibility of weakness under the hood.
This week, the IWM ETF closed at $171.81 (+0.34%), making new lows relative to its December lows but finding support at the 50% Fibonacci retrace from the Covid low to all-time high. Of note is the bullish RSI divergence forming on the daily time frame. This could be foreshadowing some corrective activity off the new lows.