According to many studies, momentum has been one of the best performing factors over the long run while the Nasdaq 100 Index has been one of the best performing indexes for many years as well. In this study, combining the two together increased both absolute and risk-adjusted returns over the Nasdaq 100 Total Return Index alone.
December 21st marked the first trading day with Tesla TSLA being included in the S&P 500 Index SPX, as it replaced Apartment Investment & Management Co. AIV. At a market capitalization of over $624 billion, TSLA is the largest company to ever join the S&P 500.
At various points previously, we have discussed the debate regarding active vs. passive management. Proponents of passive management insist that active managers cannot consistently outperform a passive benchmark and therefore investors are better off to invest in lower cost index funds.
Recently we discussed the “rotation trade” and examined the performance of the S&P 500 sectors during shifts from growth to value. Another facet of the rotation trade has been a shift from large cap to small. Today we wanted to examine sector performance in another facet of this rotation – a shift from large cap to small cap.
As we arrived at the beginning of November, much of the investment community had heightened concerns about the prospects for continued domestic equity growth during what was assumed to be a volatile market environment with the potential for a contested US presidential election.
Monday, November 9th, was the largest laggard outperformance we have in the Nasdaq Dorsey Wright (NDW) data with laggards outperforming leaders by more than 16%. Momentum crashes are not a new thing. All types of things drive the leaders/laggards spread on a day-to-day basis.
Many broad domestic equity markets moved sharply higher last Monday after investors took into account stabilization in the expected outcome of the US presidential election as well as positive coronavirus vaccine news.
Volatility swept across US markets over the last several days as fear and uncertainty surrounding the coronavirus as well as the US presidential election continue to take hold, causing the Nasdaq Composite to post its worst week since March.
Like a good caddy, the tools on the Nasdaq Dorsey Wright Research Platform offer guidance, advising you toward logical club selections based on present conditions, while you remain the ultimate decision-maker.
Domestic Equities currently hold the number one spot in the Nasdaq Dorsey Wright Dynamic Asset Level Investing (DALI) tool and populate the upper echelon of the Asset Class Group Scores (ACGS) page, confirming the technical strength/leadership from that group.
By almost any measure, 2020 has been one of the most volatile years for the market in recent memory. Through the first week of September, the S&P 500 SPX had more daily moves of +/- 2% or more this year than in any full calendar year since 2009.
On October 21st, 2020, the First Trust Focus Five Model FTRUST5 turns 11 years old. While many investors have been following this model for years, those of you who have not can read more about the model’s methodology in the First Trust Focus Five Model Fact Sheet, which includes a detailed account of the methodology, the inventory, and performance numbers that go back to inception.
We are roughly two months removed from seeing US Equity make its way back to the number one ranked asset class in the Nasdaq Dorsey Wright DALI (Dynamic Asset Level Investing) tool. This is the eighth time going back to 2000 that US Equity has been the number one ranked asset class.
On October 8, Square SQ, the payments company helmed by Twitter CEO Jack Dorsey, announced that it purchased 4,709 Bitcoins, a $50 million investment, representing 1% of the firm’s total asset. As a result, Square became the second technology firm to go long on Bitcoin in recent months after MicroStrategy MSTR, a business intelligence firm, crowned the crypto as its treasury reserve asset of choice.
There are many benefits of using a rules-based approach using Relative Strength (RS), one of the main cornerstones of our research. Relative Strength, also known as Momentum, is a time-tested investment factor that permeates our work, allowing us to identify where both strength and weakness exists across securities, sectors, and asset classes using just one objective input - price.
Domestic equity markets have certainly shown a significant amount of movement thus far through 2020, with the S&P 500 Index SPX undergoing its swiftest decline from all-time highs in March, only to rally over the next few months to print new all-time highs at the beginning of September.
The S&P 500 SPX and Nasdaq NASD have recently hit a series of fresh all-time highs and the Dow DJIA now sits less than 2% off of its all-time high which has many people wondering if the market is overbought and due for a correction.
With recently elevated volatility levels some investors are afraid to hold overnight as it’s much harder or not possible to make trades. While it seems intuitive to take risk off the table when there’s not much you can do if things head south, it takes you out of the market when most of the returns are harnessed.
Speaking to our advisor clients every day provides our analyst team at Nasdaq Dorsey Wright (NDW) with a good sense of what advisors are challenged with and what kinds of questions they are hearing from clients.
Domestic equity markets have certainly shown a significant amount of movement thus far through 2020, with the S&P 500 Index SPX undergoing its swiftest decline from all-time highs in March, only to rally over the next few months to print new all-time highs at the beginning of September
Throughout the second half of 2020, a deterioration within the U.S. Dollar has been among the primary themes in focus, and understanding the Dollar’s impact on the positions in our portfolios is important.
September has historically been one of the weakest months for the S&P 500. The momentum factor, on the other hand, has historically been very strong in September.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics Include: Updated support levels for the S&P 500 as it hits new all-time highs, timely commentary on the commodities space as it continues to demonstrate strength, and material sector pivots as we near the month of September.
The market continued to get narrower during the month of August. Looking at the Nasdaq US Mid/Large Cap Index, less than 30% of the constituents are outperforming the S&P 500 on a trailing 12 month basis. This is the lowest number we have ever seen since the beginning of the data set in 1989.
As an advisor, effectively communicating with your clients is an integral part of maintaining and growing your business. In the current era of working from home and social distancing this task has been even more difficult as many face-to-face interactions have been replaced by phone calls and Zoom meetings.
Today, we take a look at several of the best performing thematic ETFs of 2020.
With Monday's (7/20) intraday price action, the default Point and Figure chart of the S&P 500 Index (SPX) broke a spread quadruple top with a move to 3240 before moving higher to 3270 on Tuesday. This latest buy signal marks the third consecutive on the chart, confirming that demand is in control.
As we get to the end of July, we are entering the "heart" of the Q2 2020 earnings season, one of four such seasons we encounter on an annual basis. We typically find that earnings season produces some added volatility and potholes for investors to avoid.
In March, at the height of panic selling, investors pulled $326 billion from mutual funds and ETFs. Although it ended more than decade ago, the global financial crisis was the last real bear market.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics Include: Key points of resistance and support for the S&P 500, increased strength from the small cap growth camp, and sustained leadership from the generals.
The Nasdaq Dorsey Wright Technical Leaders Index suite is constructed using the Nasdaq Dorsey Wright’s Technical Leaders methodology, designed to identify companies that demonstrate powerful relative strength characteristics from within a given broad market universe or sector.
In a prospecting article from May, we looked at the relative performance of active and passively-managed funds during the volatile months of March and April, a period that theoretically should have favored active managers. With two quarters of 2020 officially behind us, we thought this would be an opportune time to take a look at the longer-term relative performance of these strategies.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics this week include identifying recent breakouts for the S&P 500, assessing strength across asset classes, and highlighting emerging trends in the investible landscape.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks.
Over the years, we have illustrated the value of relative strength-based sector rotation in a variety of ways. Most of these studies have treated the sectors generically, i.e., they looked at the performance of the best performing sector without regard to which sector that happened to be at any given time.
If you’re following our Nasdaq Dorsey Wright commentaries here, you’ll notice that we have been discussing the factors driving the wide performance dispersion between some top-performing broad market funds, namely, the Invesco QQQ Trust (QQQ) and the Invesco S&P 500 Top 50 ETF (XLG)...
As everyone in the financial services industry knows, the US equity market is open from 9:30 am – 4:00 pm EST. However, the US market now also has pre- and post-market trading from 7:00 am until open and from close until 8:00 pm.
In many ways large cap, and especially large cap growth, has dominated the story in 2020.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics this week include reviewing recent market movement through near-term overbought/oversold levels, equity-based participation indicators, and support levels on major indices.
While a cap-weighted index derives its performance from the movement of the underlying holdings multiplied by their respective allocations as determined by market cap, the Dow Jones Industrial Average is a price-weighted index, which simply means that stocks with the highest share price receive the greatest weighting in the index.
The stock market has been on an absolute tear since the end of March, evidenced by the S&P 500 Index (SPX) rallying almost 43% through Friday’s close (3/23 – 6/5). While the rebound has been a relief for many, conversations concerning the overbought status of the equity market are beginning to circulate, and perhaps justifiably so.
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics this week include the increasingly overbought posture of domestic equity indexes and the laggard rally in size & style classifications.
The CBOE S&P 500 Volatility Index (VIX), which is often referred to as the ‘fear index’ is a measure of uncertainty or volatility in the US equity market.
Since broad domestic equity indices posted a bottom on March 23rd, they have not looked back. In fact, the S&P 500 Index (SPX), Nasdaq Composite Index (NASD), and Dow Jones Industrial Average (DJIA) have each rebounded with price returns in excess of 30% (data beginning 3/23/20 through 5/27/20).
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics include sector rotation, model updates, and refined areas of leadership within the domestic equity space.
The S&P 500 and the Dow Jones Industrial Average have each finished in negative territory in 15 of the past 39 summers (or about 38.5% of the time).
Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics include fresh buy signals for the major domestic equity indexes and further outperformance from growth oriented areas.
Thus far in 2020 and throughout the COVID-19-induced sell-off and partial recovery, there has been a pronounced size and style bias within the US equity market in favor of growth over value and large-cap over small-cap.
Although the major indices are well off of the lows they reached in March, there remains a high level of uncertainty about what the future holds for the market and the economy.
