Market Trends: A Shift in Momentum?
The technology sector witnessed a mixed bag on Tuesday, with some major indices experiencing a decline while others made notable gains. The Nasdaq and S&P 100 (OEX) slipped 0.2%, while the Nasdaq 100 (QQQ) edged down 0.1%. In contrast, the NYSE Composite surged 0.7%, the S&P MidCap 400 (MDY) jumped 1.2%, and the S&P SmallCap 600 rose 1.4%.
A Tale of Two Markets
While the mega-caps continue to struggle, secondary indices appear to be forming short-term bottoms. However, it’s still early days, and caution is advised. The mid-cap sector, in particular, is showing promise, with the MDY index less than 7% away from its all-time closing high on November 25.
Mid-Cap Momentum Builds
A closer look at the MDY chart reveals several bullish indicators. The daily vortex indicator is on the cusp of turning bullish, while the daily MACD has reversed its downward trend. The five-day/13-day EMA crossover is also poised to turn bullish for the first time since early November 2024. Furthermore, the ETF remains above its 200-day and 40-week simple averages, suggesting a strong foundation for further growth.
Relative Strength in Mid-Caps
Mid-caps are gaining relative strength, which could be a sign of a broader market shift. As investors seek opportunities beyond the struggling mega-caps, mid-caps may be poised to take center stage. With their charts looking increasingly bullish, it’s worth keeping a close eye on this sector in the coming weeks.
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