Blog Post: Day 8 of $QQQ short term up-trend; Since January 10, SPY is up +2.6% but equal wt RSP is up +5.5%; QQQ +3.1% but QQQE +5%. These cap weighted indexes are now masking the strength in the other stocks! Rotation has begun. Time for me to reinvest!

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Each day large numbers of stocks have been hitting 52 week highs and all-time-highs, unlike the AI related and most other leading stocks. NVDA, MSFT and TSLA have been weighing down the cap weighted indexes.  The cap weighted indexes are now masking the progress in the other stocks. This is the exact opposite of what we had been seeing. We had seen that the few high cap stocks were driving the indexes higher and the rest of the market was not participating. So I decided tonight to compare the cap weighted and equal weighted ETFS of SPY and QQQ. My suspicions were confirmed as I specified in the title to this post. This means that it is likely safe for me to purchase strong stocks even though the major indexes do not look exceptionally strong. Mark Minervini has often said to focus on the stocks setting up and not on the indexes. So I am tiptoeing back into some of the strong stocks that are setting up. Rotation has begun and I hope these other stocks will not become extended too quickly.

 

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