Buy The Market Now?

Over the last few months one of the major ‘talking points’ that I have discussed on TV has been the crazy out performance of the NASDAQ-100…

This is the Index behind the QQQ.

Since the bottom of the market in April, the NDX has vastly outperformed the S&P 500, and even more so the Dow Jones Industrial Average.

There is always eventual mean reversion. 

We have been saying…for sometime… that the DJX was going to catch up to the SPX, and the SPX to the NDX.  

The chart below shows the return profile of the three major indexes

As you can see the NDX (blue)  got a little overheated to the point where it was WAY over bought.

The S&P 500 and the Dow were a little more in line.

With the September sell off,  you should notice one thing,  while the Dow and the S&P are down…

the NDX is getting slapped.

While the bloodletting is likely to let up in the coming days after today’s beat down, the kind of relative performance we saw in the Nasdaq-100 is rare.

I think there will be real opportunities to make money from the long end soon, but maybe not in some of the ‘mega caps’ that lead the NDX so high.

Your Only Option,

Mark

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