Copy Paste
RLT Newsletter
At this point I think I should just start copy-pasting the intro section of this newsletter because the same thing keeps happening every single day. The QQQ was up another massive 2.34% on Friday as it continues to pull away from SPY just like in 1999. Speaking of copy-paste, the bulls are partying like it’s 1999 and history is repeating itself in real time.
SPY Daily Chart
The only time in the history of QQQ that we have seen a move this extended and this vertical into new all-time highs was during the 1999 melt-up after the ETF was formed. Sure, we’ve seen other monster rallies before, but those all came after massive crashes like 2000, 2008, or the 2025 bear market. This is different. This is a straight-up face-ripping momentum move directly into new highs with zero pullbacks. Welcome to the AI tech boom... or bubble... depending on your view of things.
The QQQ chart is honestly so vertical and parabolic at this point that I think it’s going to start going backwards soon just out of pure geometry. QQQ has not even touched the 10-EMA once during this entire run, which is shows just how vertical it has been. Even during the dot-com melt-up we didn’t go this long without tagging the 10-EMA.
QQQ Daily Chart
And if you still think we are not reliving 1999 all over again, then how exactly do you explain the President of the United States telling everyone to buy DELL stock? Dude, the president is pumping DELL. Also, how do you explain INTC suddenly becoming one of the top 5 hottest stocks in the entire market?
Also how do you explain that AOL is now the hottest search engine and the coolest way to chat with your friends late into the night?
Okay maybe not that last one, but honestly the first two sound just as ridiculous if you didn’t already know they were real.
While the market remains in full beast mode, this is about as bifurcated of a market as you can possibly get. A handful of AI names and the Trillion Dollar Titans are dragging the entire market higher while huge chunks of the market are quietly lagging behind. Financials (XLF) broke down on Friday. The equal-weight S&P (RSP) is struggling at prior all-time highs instead of blasting through them like semiconductors (SMH) and QQQ. The DIA has not even made a new all-time high yet.
Software remains especially hated as IGV is still roughly 23% below its highs, although it’s starting to look a little double-bottom-y here, but more on that in a minute. Meanwhile materials (XLB), consumer discretionary (XLY), industrials (XLI), staples (XLP), utilities (XLU), and healthcare (XLV) are all showing varying levels of weakness and failing to confirm the broader move higher.
But honestly, as long as the Trillion Dollar Titans and the AI tech names continue holding this market up, I think all of that remains mostly noise for now. If we start losing leadership from the mega caps like we did late last year, then suddenly all of these divergences start to matter a whole lot more.
I also don’t really see the market rotating into consumer staples or defensive sectors right now. If anything, the one place I could realistically see rotation flowing into is software. Traders selling semiconductors are probably not rotating that money into JNJ. They’re more likely rotating it into names like PLTR or MSFT.
MSFT Daily Chart
I really do like the IGV chart right now. It has about as clean of a double bottom as you can ask for and just regained the 100-day SMA after a slight retest of the neckline. There’s also an open gap sitting up near $97 that would make for a very solid upside target.
If IGV loses the 100-day SMA again, I don’t think the bull thesis is necessarily dead, but that would definitely be a reasonable level to manage risk around. Otherwise, as long as IGV holds roughly $83 and the 200-week SMA, I think the broader bullish thesis remains intact.
IGV Daily Chart
As I have mentioned before, I like the MSFT chart along with cybersecurity names like PANW and CRWD, all of which are large components of IGV and could help pull it higher over the coming weeks.
Check out the video below where I review the 1999 correlation with today’s market and discuss why RSI is suggesting we should be nearing a short-term pullback. The probabilities and historical comparisons suggest that any near-term weakness would likely be a buying opportunity rather than the start of a bigger top.