The NDX/NASDAQ flip. A curiosity...

[Overnight]

Has anyone noticed how the NQ(NDX 100) and NASDAQ had flipped during the COVID deal?

For the past few years, the NQ/NDX had always been trailing the NASDAQ by ~250 points. The NASDAQ is ~3300 companies, 100 of which are the NDX 100 (NQ).

So when the COVID hit, the NASDAQ flipped below the NDX, because all those smaller 3200 companies' stocks were taking major damage while the stalwarts of the index, the megacaps, were fairing better.

At the peak of this crisis, the NDX seemed to be about 100-200 points above the NASDAQ.

Now, with the crisis abating somewhat, the two are about equal. Today, the NASDAQ seemed to be floating only 15-20 points behind the NDX. So soon, the NASDAQ will be above the NDX in price once again.

Can that give us a view of the future? Are peeps rotating out of the megacap techs and back into the smaller tech companies?

 

[FXtrader8911]

Trading the Indices on Fundamentals

 

[Overnight]

Trading the Indices on Fundamentals

The NASDAQ and the NDX are two different entities. I thought I made that clear in my OP.

 

[TooEffingOld]

You're too nice to people....

The NASDAQ and the NDX are two different entities. I thought I made that clear in my OP.

 

[FXtrader8911]

The NASDAQ and the NDX are two different entities. I thought I made that clear in my OP.

Indeed you did, my answer was to draw your attention that your June 4 observation was already anticipated since May 21, however, my mistake for not clearly stating that the expectation applied to the 100 Index. BTW, the RUSSELL is outperforming the S&P so same phenomenon... smaller caps are bouncing back faster than mega caps. i.e. Shutdown favoured the mega's, opening-up favours the minors.

 

[Overnight]

Indeed you did, my answer was to draw your attention that your June 4 observation was already anticipated since May 21

"...The NDAQ is quite detached from the DOW, S&P & RUSSELL, doing its own thing upwards but it is to be noted that AMAZON weighs in at 14% of the NDAQ while just about the whole NDAQ is moved by just the top 5 techs, all positioned to gain from the virus lockdown, it would stand to reason to see the NDAQ fall (relative to the other Indices) when the economy is fully re-opened."

So what is the "NDAQ"? Is that the NDX, or the NASDAQ?

My point is see my OP, and that the NDX and NASDAQ had flipped in price, and have now started to revert back to what was "normal" between the two. NOTHING TO DO with the DOW, SP or RUSSELL.

I did not bring up the DoW, SP or Russell. My commentary was about the price difference between the NDX and the NASDAQ, and how one was higher than the other for a long time. Then they flipped. Now they are flipping back.

 

[FXtrader8911]

I did not bring up the DoW, SP or Russell

Noted, understood and in agreement by having said: "The NDAQ is quite detached from the DOW, S&P & RUSSELL, doing its own thing

The S&P Vs RUSSELL is similar in behaviour to the NDX & NASDAQ (in %, not quantity) i.e. smaller caps are outperforming mega-caps, this was mentioned just to show the relationship between mega & small cap is not unique to tech stocks.

And yes, I refer to the NDX as the NDAQ, apology for the confusion.

As for the original Q "Can that give us a view of the future? Are peeps rotating out of the mega-cap techs and back into the smaller tech companies?" I don't think this relationship is telling the future, it just shows who is getting the stimulus Vs who isn't, when the stimulus ends, the relationship might well reverse again as I think small caps are in a worst space then the mega.

 

[Overnight]

...

The S&P Vs RUSSELL is similar in behaviour to the NDX & NASDAQ (in %, not quantity) i.e. smaller caps are outperforming mega-caps, this was mentioned just to show the relationship between mega & small cap is not unique to tech stocks.

Thank you. That is brilliant observation on your end. I mean, utter GENIUS!