1. QQQ vs. IWM disconnect opening up
2. Iran Shock Hits Germany. DAX Now Rich
3. EU Financials: Credit Flashing Amber
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
QQQ vs. IWM disconnect opening up
QQQ & IWM are +5% YTD and +12% YTD. The conundrum is that we have seen small cap outperformance despite financial condition indices not returning back to their pre Iran Shock levels.
On Qi’s model, QQQ relative to IWM sits 1 sigma below model fair value. Inflation expectations are a top driver of this disconnect. Inflation expectations remain close to 6mth highs – despite the ceasefire extension, the extent of oil damage continues to linger.
With market breadth remaining poor, chasing secular winner sover beta has appeal. Below, we show the FVG of this pair vs. spot price action– the strength of the relationship indicates that macro is onside for QQQ relative to IWM, just as we enter into the heart of tech earnings season.
Continue reading our analysis by downloading the PDF above
Related Articles
Identify price dislocations, opportunities, regimes and sensitivities
1. GS HF VIP vs. VIP Short: Crowding Stress
2. Heavy AI Issuance Creates a Contrarian Credit Opportunity
3. ChiNext: the tape and the model have parted ways
Identify price dislocations, opportunities, regimes and sensitivities
1. US Metals & Mining
2. China vs. India
3. NZDCHF
Identify price dislocations, opportunities, regimes and sensitivities
1. XLF: Running Ahead of Macro Support
2. Sterling looks stretched
3. Tech's Quiet Re-Rating
Identify price dislocations, opportunities, regimes and sensitivities
1. Mag7: Impatience Priced In?
2. EURNOK rally losing macro support
3. US Housing rally runs ahead of macro