Dec 9 Quad Index Relative Strength Comparison

Dec 9, 2013: 4:06 PM CST

A quick chart of the four main US Equity Markets – as seen through tradable futures contracts – shows our relative strength leader and laggard market.

Which market broke decisively to new highs?  Which is so near an all-time high you can taste it?  And which two indexes are struggling to reach their former glory days from earlier in December?

Let’s take a look at a quick comparison chart to answer these questions:

Relative Strength US Equity Index Comparison Intraday 30 min chart

Our Relative Strength Leader is the Tech-heavy NASDAQ (seen with the @NQ futures contract) which cleared – with a gap Friday – above the 3,500 “round number” reference level.

Strangely enough – something that should grab our attention – our Relative Strength Laggard is the small-cap Russell 2000 (@TF futures contract) which peaked on November 29 and has traded lower, save for a quick rally last week.

The Dow Jones Industrial Index (@YM) similarly shows relative weakness with the Russell 2000 index, only the Dow Jones held strong in today’s session while the Russell 2000 index declined during the same period (it fell sharply after December 9th’s open).

Finally, our “middle of the road” market is the S&P 500 – @ES mini futures – which scraped against its all-time high (the November 29th holiday low volume pump into 1,813) with a flat range session today.

Typically, the S&P 500 and Dow Jones trade closely together while the NASDAQ and Russell 2000 move similarly.

It’s interesting to see a short-term breakdown in this traditional relationship as we’re seeing now.

Continue watching these main markets for additional signs of future strength or weakness relative to their prior high levels – either the indexes themselves or the related futures contract (or even ETF for an additional comparison depending on your trading style).

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