Is the Nasdaq 100’s Out-Performance Nearing a Top?

nasdaq 100 out performance ratio correlation s&p 500 chart trend peaking top year 2020

Nasdaq 100 Index / S&P 500 Index Ratio “Monthly” Trend Chart

Is the latest ramp higher and Large cap tech stocks have been the clear market leader, out-performing the broad market for months.

In today’s chart, we look at the Nasdaq 100 to S&P 500 performance ratio in an effort to answer the question: Is the ramp higher in tech stocks and severe out-performance sustainable?

While we may not be able to answer that question today, the ratio IS at an inflection point. And following today’s ratio chart should help us answer that question.

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As a reminder, the ratio rises when the Nasdaq 100 is out-performing the S&P 500. Note also that it is a longer-term “monthly” price chart.

Important Breakout / Topping Price Test Is In Play!

As you can see, it’s been out-performing by a wide margin. Note the 20-year up-trend channel (green shaded) marked by each (1).

The ratio is now testing the top of the channel as well as the 2000 highs at (2). This breakout test comes as momentum is at the highest level in 20-years. Time for a pause? Stay tuned!

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.