Special Report





This weekly continuation chart is the best indication of what’s been going on in the stock market since 2002.  This is a spread chart showing the relationship of the Emini Nasdaq Index versus the Emini S&P Index.  The S&P index is a broad representation of the stock market in general.  The Nasdaq is considered more of a reflection of the tech sector.  The tech sector has been the driving force or leader in this spread since it bottomed in August 2002. Good examples of this relationship are the FAANG stocks.  Each of these tech stocks;  Facebook, Apple, Amazon, Netflix, and Google trade on the Nasdaq exchange.   The market capitalization of these stocks was equal to $3.1 Trillion in March of 2019. I would suggest that the tech sector could be vulnerable due to the attitude of some to regulate or change the monopolistic nature of these behemoths in technology.

I know there’s a lot going on with all the lines I’ve drawn on the chart, but here’s what I want you to take away from this picture.  The market has been in a solid uptrend since these two indexes were trading at even money over 17 years ago.  The rally began in earnest in November 2008 after 6 years of consolidation.  The market has been achieving increasingly higher angles of ascent over time.  The greater the angle of ascent, the more severe corrections can be.  The potential head and shoulders top bears watching.  The December spread is trading at a 500-600 point premium over the March contracts.   You can incorporate this discount into your strategies.   In my opinion, there are clear break down points to the downside where the market would accelerate, and clear break out points to the upside that would suggest continuation of the bullish trend.  You need to ratio these indices Five Emini Nasdaq to two Emini S&P to keep the spread equalized.  As the song goes, “you don’t know what you’ve got till it’s gone!”.  Feel free to call in or email for further information or specific recommendations.

There is significant risk involved in trading futures and/or options on futures.  Futures and/or options of futures trading may not be suitable for all investors.  Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.