QQQ LAGS WITH LOWER HIGH -- PERFCHART AND RRG FOR MAJOR INDEX ETFS -- MICROSOFT, INTEL AND AMGEN WEIGH -- GOOGLE STALLS AT RESISTANCE -- FACEBOOK NEARS SUPPORT -- AMGEN CORRECTS

QQQ LAGS WITH LOWER HIGH... The Nasdaq 100 ETF (QQQ) is still lagging the broader market with a series of lower highs since December. Chart 1 shows QQQ breaking out in late October and hitting new highs throughout November. Relative weakness started in late December when QQQ failed to take out its late November high, and continued into January with another lower high. The ETF bounced off support in the 100 area last week, but has yet to break above a prior high and remains in a two month downtrend. This downtrend, however, is still deemed a correction within a bigger uptrend. A breakout at 105 would end the correction and signal a continuation of the bigger uptrend.

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Chart 1

The indicator window shows Aroon Up in green and Aroon Down in red. There are two steps to a bull signal: Aroon Up crosses above Aroon Down and Aroon Up hits 100. The opposite applies for a bear signal. Aroon Up crossed above Aroon Down twice this year, but failed to get above 70. These bullish crosses are enough to signal a bounce, but not enough to reverse the two month uptrend. Aroon Up needs to reach 100 to turn fully bullish and negate the bearish signal, which was triggered in mid December when Aroon Down first hit 100. Chart 2 shows the Nasdaq 100 Equal-Weight ETF (QQEW) with a falling channel over the last few months. A move above 43 is needed for a breakout.

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Chart 2

PERFCHART AND RRG FOR MAJOR INDEX ETFS ... PerfChart 3 shows performance for eight major index ETFs since December 1st. I picked December 1st because QQQ peaked at the end of November and trading has been quite choppy since then. As the chart shows, QQQ and the Nasdaq 100 Equal-Weight ETF are the only two showing losses. These two show both absolute and relative weakness. On the right side of the chart, we can see relative strength in small-caps and mid-caps because MDY, IJR and IWM are up the most. DIA and SPY are up the least and showing relative weakness.

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Chart 3

Chart 4 shows a Relative Rotation Graph (RRG) with seven major index ETFs. Note that I had to choose one as the benchmark (SPY). Relative to SPY, notice that IJR and IWM are the clear leaders. QQQ and QQEW are in the weakening quadrant. QQQ moved from the leading quadrant to the weakening quadrant over the past week. QQEW has been in the weakening quadrant for 10 weeks (the entire line). Chartists can also consider leaving SPY in the group and using the S&P Total Market iShares (ITOT) as the benchmark.

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Chart 4

MICROSOFT, INTEL AND AMGEN WEIGH... PerfChart 5 shows the top ten holdings for QQQ, and the overall picture is mixed. QQQ is down 1.24% since December 1st and seven of the ten components are also down. Of the top ten, only Apple, Amazon and Comcast show gains. Apple accounts for 14.5% of the ETF, but its gains were offset by the other losses. Microsoft is the big loser with a 12.77% decline and accounts for over 7% of the ETF. Intel and Amgn are down around 9-10%. There is clearly more weakness than strength in the top ten.

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Chart 5

GOOGLE STALLS AT RESISTANCE, FB NEARS SUPPORT AND AMGN CORRECTS... Chart 6 shows the top ten stocks for QQQ on one chart. This chart was created with a StockCharts PRO account, which allows up to ten symbols on one SharpChart. Readers can click on this chart to open it and see the settings. A screen shot of the settings is shown below. Charts with red annotations on the right are bearish, and charts with green annotations are bullish. At this stage, I count four bullish and six bearish charts. Apple should count double because it its 14.5% of the ETF. The most interesting charts are Google, Facebook and Amgen. Facebook is trading near support, Google is consolidating near resistance and Amgen is correcting after hitting a new high in early December. Breakouts by two of these three could tilt the balance back to the bulls for QQQ.

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Chart 6

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Chart 7

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