Clear Leaders and Laggards as Q2 Nears End

The Nasdaq is up about 30% on the year. The Dow is up just 2%.

Technical Edge 

• NYSE Breadth: 56% Upside Volume

• Advance/Decline: 55% Advance

• VIX: ~$13.50

  • Traded a recent low of $12.73. That’s the lowest it’s traded since pre-pandemic in early 2020 (i.e. with stocks at ATHs)

There are two trading sessions left in the quarter as investors start to turn their attention to Q3 and the second half of the year.

Through June 28th, there are clear leaders and clear laggards. That applies specifically to the sectors but also broadly to the market.

The Nasdaq is up about 30% on the year, while the S&P 500 is up about 15%. Clearly, mega-cap tech is flexing its muscle a bit, as the Dow and Russell 2000 are up just 2% and 5% so far in 2023, respectively. Even the 5% boost in the Russell is being masked a bit, as it has rallied 2% in two days.

Will we see the winners continue to run in the second half or will they rotate out of the winners and into the laggards?

SPY

Testing into the $437.50 area now, which has been resistance and is the 50% retracement. 

SPY is trading near Wednesday’s HOD in the pre-market. An open near this mark and failure to hold it could create a quick cash-flow short. Otherwise, daily-up could open the door to $439. 

That’s the gap-fill level and the 61.8% retracement.

• Pivot: $437.50

• Upside Levels: $439, $441, $443.50

• Downside Levels: $434.50, $431.50, $429 to $430

S&P 500 — ES